Monday, September 23, 2019
IHS Markit, noting it had harnessed the power of artificial intelligence (AI) to assess, automate, and predict the future production of each of the nearly one million producing oil and gas wells in its North American data- bases, is forecasting rapid onshore oil-production decline rates, with existing wells falling by 35% over the next 12 months. This compares with base declines of 5% to 14% for most petroleum systems globally during the same period—and a base decline rate of less than 15% a decade ago in the U.S.
The market intelligence provider asserts it is the first time AI technology has been used to forecast well-by- well future production. IHS market adds that it is going to be costly for companies to just keep production flat, according to analysis from the new IHS Markit Automated Well Forecasting Technology. The evaluation assessed the entire North American production system, including both conventional and unconventional wells across the system. The results yielded important insights into the challenges facing exploration and production companies.
IHS Markit says it can leverage the technology to conduct similar assessments of other producing wells and systems globally, but started with North America due to the significant level of detail in the data and the focus of investment in the region. Found was that North American onshore based production-decline rates are accelerating
in both absolute and percentage terms. Comparing 2017 to 2019, IHS Markit calculates that the onshore oil base decline nearly doubled, measured by the production drop from January through December of a given year, without accounting for wells added by new capital. Base oil production declined by 1.8 MMbbld in 2017, but will fall by 3.5 MMbbld, or 35%, in 2019. “The treadmill that producers are fighting is moving very fast,” said Raoul LeBlanc, vice president of North American unconventional oil and gas at IHS Markit. “As producers come under pressure to restrain investment, this decline rate is becoming the main factor that promises to slow the explosive U.S. production growth we’ve witnessed in the past few years.”
(SOURCE: The Weekly Propane Newsletter, September 16, 2019)
The market intelligence provider asserts it is the first time AI technology has been used to forecast well-by- well future production. IHS market adds that it is going to be costly for companies to just keep production flat, according to analysis from the new IHS Markit Automated Well Forecasting Technology. The evaluation assessed the entire North American production system, including both conventional and unconventional wells across the system. The results yielded important insights into the challenges facing exploration and production companies.
IHS Markit says it can leverage the technology to conduct similar assessments of other producing wells and systems globally, but started with North America due to the significant level of detail in the data and the focus of investment in the region. Found was that North American onshore based production-decline rates are accelerating
in both absolute and percentage terms. Comparing 2017 to 2019, IHS Markit calculates that the onshore oil base decline nearly doubled, measured by the production drop from January through December of a given year, without accounting for wells added by new capital. Base oil production declined by 1.8 MMbbld in 2017, but will fall by 3.5 MMbbld, or 35%, in 2019. “The treadmill that producers are fighting is moving very fast,” said Raoul LeBlanc, vice president of North American unconventional oil and gas at IHS Markit. “As producers come under pressure to restrain investment, this decline rate is becoming the main factor that promises to slow the explosive U.S. production growth we’ve witnessed in the past few years.”
(SOURCE: The Weekly Propane Newsletter, September 16, 2019)
