Hydrocarbon Activity in an Era of Low Oil Prices

Abstract

ABSTRACT Recent declines in oil and gas prices have led to concerns about the future levels of oil and gas production in the lower-48 United States. The long-term outlook for lower-48 gas production has been analyzed from the perspectives of lower-48 resource base. The effects on this long-term outlook of the decline in oil and gas prices since the beginning of 1986 have also been assessed. The analysis indicates that lower-48 oil and gas production could be kept near current levels, despite the decline in oil and gas prices. Improved recovery of both oil-in-place and gas-in-place will play a major role in future lower-48 production. Without improved recovery, lower-48 oil and gas production cannot be stabilized. The declines in oil and gas prices have severely reduced net industry cash flow. As a result, despite favorable resource economics, many parts of the industry are unable to undertake much exploration or development activity.