Oil from US shale on track to rise 16% in 2019

ogj.com/articles/2019/05/oil-from-us-shale-on-track-to-rise-16-in-2019.html

HOUSTON, May 21 05/21/2019 By OGJ editors US shale operators are on course to increase oil production
markedly in 2019. The growth in US onshore production from the first quarter through the fourth quarter could
come in at around 1.1-1.2 million b/d, or 16% for the full year, according to Rystad Energy. After a paltry first
quarter, depressed by weather effects, US shale players over the past weeks have assured investors that they will
achieve previously communicated production targets, as well as demonstrate excellent capital discipline and cost
control. “Despite temporary challenges faced in the beginning of the year, E&P companies are set to deliver on their
original production and capital targets, with some being well positioned to perform above initial expectations. US
shale players can still be expected to deliver around 16% oil growth in 2019. Several operators have in fact raised
their production guidance for the remainder of the year,” says Veronika Akulinitseva, senior analyst at Rystad
Energy. Rystad Energy has analyzed the first quarter results of about 50 US shale operators. The results indicate
that US producers, on average, saw a slowdown in oil production growth in the first quarter. Output grew by 0.1%
relative to the fourth quarter of 2018. “The slow first quarter implies an even steeper expected growth curve for the
remainder of the year. In fact, acceleration of oil production for many operators is already under way and oil
additions are thus likely to increase notably already in the second quarter of 2019,” Akulinitseva said. Canadian
operator Enerplus was the player that raised its oil guidance the most, expecting 10% higher volumes than
originally guided. It said growth is already under way and the company is aiming to generate a double-digit rise in
production already in the second quarter. Likewise, SRC Energy, an independent operator in the Denver-Julesburg
basin, raised its oil target by 7%, attributing the adjustment to overly conservative original guiding.

US shale operators are on course to increase oil production markedly in 2019. The growth in
US onshore production from the first quarter through the fourth quarter could come in at
around 1.1-1.2 million b/d, or 16% for the full year, according to Rystad Energy.

After a paltry first quarter, depressed by weather effects, US shale players over the past
weeks have assured investors that they will achieve previously communicated production
targets, as well as demonstrate excellent capital discipline and cost control.

“Despite temporary challenges faced in the beginning of the year, E&P companies are set to
deliver on their original production and capital targets, with some being well positioned to
perform above initial expectations. US shale players can still be expected to deliver around
16% oil growth in 2019. Several operators have in fact raised their production guidance for
the remainder of the year,” says Veronika Akulinitseva, senior analyst at Rystad Energy.

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Rystad Energy has analyzed the first quarter results of about 50 US shale operators. The
results indicate that US producers, on average, saw a slowdown in oil production growth in
the first quarter. Output grew by 0.1% relative to the fourth quarter of 2018.

“The slow first quarter implies an even steeper expected growth curve for the remainder of
the year. In fact, acceleration of oil production for many operators is already under way and
oil additions are thus likely to increase notably already in the second quarter of 2019,”
Akulinitseva said.

Canadian operator Enerplus was the player that raised its oil guidance the most, expecting
10% higher volumes than originally guided. It said growth is already under way and the
company is aiming to generate a double-digit rise in production already in the second
quarter. Likewise, SRC Energy, an independent operator in the Denver-Julesburg basin,
raised its oil target by 7%, attributing the adjustment to overly conservative original guiding.

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