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Petroleum industry

ConocoPhillips Forecasts 10-18% Shale Production Growth Amid Asset Sales

Strategic Insights

— 1 min read

ConocoPhillips, the third-largest U.S. oil company, has outlined its production growth expectations amidst a $10 billion asset sale program. The company's vice president, Ryan Lance, states that onshore U.S. shale production is expected to grow by 10-18% annually between 2010 and 2014. However, overall production is forecast to remain flat at 1.75 million barrels of oil equivalent per day over the next two to three years due to divestitures. The Eagle Ford Shale and North Barnett Shale in Texas, and the Bakken Shale in North Dakota, will drive U.S. shale production growth, with output expected to increase to over 100,000 barrels of oil equivalent per day by 2013.

Key Takeaways:

  • ConocoPhillips expects its onshore U.S. shale production to grow 10-18% annually between 2010 and 2014, driven by the Eagle Ford Shale and North Barnett Shale in Texas, and the Bakken Shale in North Dakota.
  • U.S. shale production is expected to reach over 100,000 barrels of oil equivalent per day by 2013, with the Eagle Ford Shale output increasing to about 45,000 barrels of oil equivalent per day.
  • ConocoPhillips expects to increase its capital spending in the Eagle Ford Shale area this year and to have 13 rigs drilling in the first quarter.
  • The company expects production in Australia to increase 4-6% per year from 2010 to 2014, while output in Canada is seen increasing 10-15% per year in the same period.
  • ConocoPhillips is evaluating options to trim its refining and marketing business, including selling assets and arranging joint ventures, but does not plan to spin-off its downstream business.

Statistics:

  • Expected annual growth in ConocoPhillips' onshore U.S. shale production: 10-18%
  • U.S. shale production expected to reach by 2013: over 100,000 barrels of oil equivalent per day
  • Expected output in the Eagle Ford Shale by 2012: about 45,000 barrels of oil equivalent per day
  • Capital spending increase in the Eagle Ford Shale area: expected in 2011
  • Rigs drilling in the Eagle Ford Shale: 13 in the first quarter of the year
  • Expected annual growth in production in Australia: 4-6% from 2010 to 2014
  • Expected annual growth in production in Canada: 10-15% from 2010 to 2014

Sources:

  • Dow Jones Commodities News Select via Comtex
  • Dow Jones Newswires, Isabel Ordonez
  • Comtex SmarTrend Alert
  • ConocoPhillips presentation
  • Copyright (c) 2011 Dow Jones & Company, Inc.

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