The US crude oil production has been on an upward trend in 2022 amid a strong recovery in global energy demand from the Covid-19 pandemic. According to the Energy Information Administration (EIA), crude production was highest in August 2022 at 11.87 million barrels per day (mmbd). This is still well below the 12.82mmbd achieved in February 2020, just before Covid-19 was declared a pandemic. Nearly three-fourths of this production was obtained from the shale plays in the Lower 48 (L48) region.

In 2021, the US crude oil production largely recovered from the pandemic woes as easing travel restrictions led to a surge in fuel demand in domestic as well as overseas markets. Higher refinery runs and the OPEC+ group production cuts encouraged US operators to expand their drilling activities and, thus, oil and gas output.

Of late, shale oil and gas producers are primarily focusing on maximising value for their shareholders. This is in stark contrast to the previous oil price downturn during 2014-2016 when companies kept adding drilling and completion crews to drive output. The current scenario is reflected in the number of rigs that are operational across the US L48. According to the EIA data, although the rig count has increased by more than 200% from the pandemic lows of 222 recorded in August 2020, it is still lower than the 719 rigs that were active before the pandemic in February 2020.

Deal-making in the US shales was marked by two major mergers during H1 2022. The first merger was announced in March 2022 and involved Oasis Petroleum and Whiting Petroleum in a deal worth more than $6.0bn. This was followed by the merger of Centennial Resource Development with Colgate Energy in May 2022 for $3.9bn. Furthermore, Riverbend divested some of its non-operated shales assets to an undisclosed buyer for a purchase consideration of $1.8bn.

US; shale
Crude oil production in the US, 2018-2022

The competitive landscape for shale oil production in the US L48 was led by ConocoPhillips, which has a strong presence in the Permian basin. It was followed by EOG Resources, which is a dominant player in the Eagle Ford shale play. Prominent Marcellus driller EQT and Southwestern Energy were the largest gas producers in the US shales in 2021.

Further details of the US shale oil and gas companies can be found in GlobalData’s new report, ‘Unconventional Production in the US Lower 48, H1-2022’.