E&P Companies Did More With Less In 2015
The year-long depression in oil and natural gas prices helped spur continued innovation in the energy space in 2015. E&P companies drove down well costs and operational expenses to deliver wells that remained economic, with far lower pricing, than imagined possible heading into last year. Industrywide, horizontal well costs declined by as much as 35 percent by late 2015 (vs. mid-2014) while lease operating costs were down more than 10 percent for many U.S. E&P operators.
In The Headlines
David Niles|SSA & Company
The oil and gas industry is operating under unprecedented pricing pressures. Recent drops in crude prices to below $30 a barrel for the first time in 12 years have prompted fears of bankruptcy among some companies. Fortunately, this pressure arrives at a time when companies can use digital, mobile, and advanced analytics to cut costs, maximize production and find new areas of growth. Used effectively, data reduces the need for layoffs and other drastic, firm-wide changes.
Topic of Discussion
Sujit Potdar|Aspen Technology
Despite record low LNG prices, and the ever increasing capital costs of new production plants, there has been a significant amount of pressure on the industry to increase capacity by improving existing plant efficiencies and constructing more facilities. Demand for LNG as a carbon friendly energy source continues to grow in many regions. Before the end of the decade, when most of the current construction projects will reach completion and be in production, there will be a short period of oversupply, but not for long. By 2021, the world will need additional supply capacity – more output, more plants.