Eric Peterson, ARB's Director of Market Research and Analysis, addresses the growing outlook of production in the Permian basin and assesses it's effects on the takeaway infrastructure.
Click to view full presentation...
U.S. Activity
• WTI forecasted to hit $56-$57 range by YE 2017
• Total rig count has increased nearly 75% from May 2016 lows
• North American production to add an incremental 1.2MM in next 2 yrs
Permian Basin
• Acreage prices and deal volume have reached record levels in 2016
• Drilling and completion enhancements boosting IP rates, EUR’s and proppant usage
• Expansions of pipeline takeaway capacity will not be sufficient, 300kbpd of new build infrastructure needed by Q1 2019
• Timing of capacity expansions is crucial, could see price differentials blowout if production outpaces demand build out