The U.S. shale industry is set to achieve a significant milestone in 2021: If West Texas Intermediate (WTI) futures continue their strong run and average at $60 per barrel this year and natural gas and NGL prices remain steady, producers can expect a record-high hydrocarbon revenue of $195 billion before factoring in hedges, a Rystad Energy analysis shows.
The estimate includes hydrocarbon sales from all tight oil horizontal wells in the Permian, Eagle Ford, Bakken, Niobrara and Anadarko regions. The Permian Basin alone is set to generate a pre-hedge $110 billion in hydrocarbon sales from tight oil activity this year, compared to $91 billion in 2019.
The $45 per barrel WTI environment is viewed as the new maintenance scenario with a conservative spending profile. The $55-$65 range paves the way for significant output growth in the next five years, with pre-COVID-19 production records being surpassed by late 2022 or 2023.
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