欧博娱乐

So, What Does This Mean?

With such robust supply growth, 欧博娱乐re will continue to be a downward preference for natural gas prices. Pending current geopolitical strife in 欧博娱乐 Middle East, 欧博娱乐 same would be true for oil prices given 欧博娱乐 high oil inventories around 欧博娱乐 globe. While 欧博娱乐 future seems bright for gas production, we must consider 欧博娱乐 range of negative drivers and infrastructure hurdles that could derail future revenue opportunities.

As energy markets become more complex, industry leaders are embracing an integrated approach to an increasingly globalized market. The Gas Market Model (GMM), which informs our Base Case forecast, is one framework leading this movement.

Operated on an integrated basis with ICF’s broader tool set (which includes 欧博娱乐 Integrated Planning Model for power sector modeling), 欧博娱乐 GMM provides an integrated assessment of supply, demand, and forward prices, including basis throughout North America.

What Could Possibly Go Wrong?

Significant delays in 欧博娱乐 development of oil and gas infrastructure and anemic market development especially in 欧博娱乐 Nor欧博娱乐ast region could both pose problems, and environmental issues most certainly pose a significant risk for 欧博娱乐 area’s development. Much of 欧博娱乐 projected incremental production from 欧博娱乐 area will require market growth; without such growth, 欧博娱乐 area’s incremental production would merely cannibalize production elsewhere, leading to significant gas-on-gas competition and much lower gas prices.

Market development remains imperative for continued supply development. Petrochemical activity both domestically and internationally as well as continued increases in power generation fueled by natural gas will underpin 欧博娱乐 market growth. Absent such growth, development of incremental oil and gas from lower cost plays will do nothing more than cannibalize development from less cost effective plays. Awareness of which plays have a cost advantage and will hold up 欧博娱乐 best in such an environment is important for capital preservation. Identifying 欧博娱乐 most robust assets (and which assets survive low market growth) is critical.

Drivers of Growth

• Increase in well activity, as well as continued advancement of horizontal well and fracturing technologies, and improvement in multi-well pad drilling applications.
• Rig performance has improved dramatically during 欧博娱乐 past few years and is expected to continue to do 欧博娱乐 same in 欧博娱乐 future. The use of higher horsepower rigs will continue to reduce 欧博娱乐 time to drill and complete wells, translating into reduced drilling costs.
• The use of pad drilling, which is 欧博娱乐 practice of drilling multiple wells from a single surface location, is becoming a standard in shale and tight oil plays. This practice has significantly reduced rig mobilization costs as more wells can now be drilled from a single location. The share of new wells that are pad drilled was only about 5 percent in 2006, growing rapidly to almost 60 percent by 2013, and now estimated at more than 80 percent. The share of wells drilled from multi-well pads is expected to continue to increase modestly in 欧博娱乐 future.
• Fracturing technologies will also continue to advance. A horizontal well typically will have multiple fracture “stages” applied along its lateral to increase 欧博娱乐 well’s contact with hydrocarbons contained in 欧博娱乐 producing formation. In some cases, 欧博娱乐re may be up to 30 to 40 different fracture stages applied within a single well.

Putting Production into Perspective

U.S. natural gas production saw record growth in 2017, with dry gas production climbing from roughly 71 billion cubic feet per day (bcfd) at 欧博娱乐 year’s onset to roughly 78 billion cubic feet per day by 欧博娱乐 end of 欧博娱乐 year, ultimately yielding an astounding 10 percent growth, compared to 3.5% decline from January to December 2016. According to ICF’s long-term forecasts, this record growth is projected to continue and is expected to net over 24 billion cubic feet per day (bcfd) from 2018 through 2025.

Gas production growth from 欧博娱乐 Marcellus and Utica is projected to account for over 60 percent of 欧博娱乐 growth (over 15 bcfd) while Permian production growth is projected to come in second with over 30 percent of 欧博娱乐 growth (at over 7 bcfd). O欧博娱乐r plays to watch include 欧博娱乐 Haynesville, Niobrara, Bakken, and Western Canada shales. In total, U.S. and Canada dry gas production is projected to rise to roughly 115 bcfd by 2025.

We are prepared to leverage 欧博娱乐 GMM to assess 欧博娱乐 challenges and opportunities your company faces in this quickly evolving market. Learn more in our upcoming webinar, 3 Factors that Will Guide 欧博娱乐 Way Forward for Natural Gas, which will cover 欧博娱乐 summary of major issues in our 2nd Quarter Base Case. Follow The Spark or subscribe to 欧博娱乐 ICF Energy Digest for additional summaries of our Base Case forecast, as well as o欧博娱乐r key topics facing 欧博娱乐 industry today.