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Unconventional and Deepwater Developments have Transformed the U.S. Oil & Gas Supply
IHS ENERGY
2013 Well Completions
Horizontal - Gas
Horizontal - Oil
Vertical - Gas
Vertical - Oil
Primary Play Type
Shale/Tight Gas
Shale/Tight Oil
Sub-Salt Miocene and Lower
Tertiary Plays Fuel Growth in the
Deepwater GOM
Analysis of permitting activity in the Gulf of Mexico (GOM) suggests the
Miocene and the overlapping Miocene Sub-Salt and Lower Tertiary play
areas remain the hot spot for permitting activity in the post-Macondo
period, with other play areas seeing only sporadic permitting activity.
Examination of new well permit submissions across plays reveals a
concentration of planned activity in the Miocene and the overlapping
Miocene Sub-Salt and Lower Tertiary plays, accounting for close to 90%
of total permits submitted in deepwater GOM. The decline in permitting
submissions in the Miocene play is of concern, as it is responsible for the
bulk of current production from the GOM deepwater and is in need of
both infll drilling and close-in exploration in order to ofset feld decline.
The continued focus on the Lower Tertiary and Miocene sub-salt portends
signifcant longer-term growth and IHS expects future oil production from
new developments to reach > 1.5 mmb/d over the next 10 years.
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Kaskida Heidelberg
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Sub-Salt Miocene and Lower Tertiary Plays Fuel Growth in the Deepwater GOM,
Source: IHS Energy Vantage and Growth Play Service
Two Plays Leading The Charge
Tight-oil development has led the resurgence in North Americas
oil production. Two plays the Bakken Shale in North Dakotas
Williston Basin, and the Eagle Ford Shale in Texass Gulf Coast
Basin have provided the most signifcant volumes and are
each producing more than 1,000,000 b/d. Exploration and
development continue in prospective basins across the
continent, although no play has yet yielded the commercial
opportunities for growth found in the Bakken or Eagle Ford.
For more about IHS Energy information,
analytics, and insight: sales.energy@ihs.com
888.OIL.DATA (645-3282)
Supply Transformation Economics
Once a play is delineated, resource play development is generally
characterized by ofering lower risk profles than many conventional
opportunities, and providing greater scalability for aggressive product
growth. However, the range in breakeven economics for domestic
tight-oil investments can difer signifcantly by play, and even within
a play. Insight gathered using IHS tools such as IHS Fekete and
IHS Enerdeq Browser combined with the forward-looking commercial
analysis from IHS North America Supply Analytics aids operators in
their search for the most prospective acreage within resource plays.
Breakeven point for select North American Oil Plays. Average breakeven
economics denoted in red. Source: IHS North America Supply Analytics
100
90
80
70
60
50
40
30
20
10
0
Eagle Ford
Bakken
Niobrara
Utica Updip Oil
US $/bbl
0
100
200
300
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1,100
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Months
Production Trajectory for Major Tight Oil Plays
Eagle Ford (IHS Jan 09 - Oct 13)
Niobrara (IHS Jan 10 - Oct 13)
Wolfcamp (IHS Jan 06 - Sep 13)
Bone Spring (IHS Jan 03 - Sep 13)
Mississippian (IHS Jan 09 - Jul 13)
Bakken, Three Forks (IHS Jan 00 - Oct 13)
Transforming Reserve Compositions
The unconventional revolution has not only transformed the supply outlook
in the United States, but has also transformed the oil and gas companies
developing this large resource. As the oil-to-gas price ratio has remained
at historically high levels, operators have been allocating a larger proportion
of capital expenditures toward liquid weighted unconventional plays.
As a result, weve seen a dramatic shift in the reserve composition for
many producers in a very short period of time.
2009 2012 Liquid Weighted Reserve Compositions. Source: IHS Energy


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ihs.com
March 2014
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