2018 Is A Year For The Record Books

In the previous Unconventional Yearbook, Stratas Advisors presented 2018 growth estimates of 18% for U.S. unconventional resources, calling for average production of 16.6 MMboe/d for the year. With 2017 and 2018 largely in the books, it is safe to say that 2018 production is likely to average 17 to 17.5 MMboe/d, approximately 4% above the company’s estimate from last year.

So what did Stratas get right and where did things go astray? For starters, the Permian came on stronger than expected. A quick look at last year’s yearbook forecast confirms Stratas’ call for 3.7 MMboe/d, translating to 1.2 MMboe/d of growth from unconventional resources in the Permian. Comparing the estimate to the 1.6 MMboe/d growth (as of Nov. 13) shows a greater than 30% upside surprise. Additionally, the Bakken accounts for another 0.2 MMboe/d of unexpected upside. Combined, the Permian and Bakken account for almost 90% of the surprise.

Notably, the Wolfcamp in the Delaware sub-basin is the key resource behind the Permian’s remarkable growth. Other surprises in 2018 worthy of mention include the Scoop play, which is surging faster than expected on the back of the Springer Shale, and the Powder River Basin, driven by strength from multiple horizons including the Turner, Sussex, Mowry and Niobrara, among others.