I have been noting falling rig counts for a while now. Checking Berman:
June 12 deck : http://www.artberman.com/wp-content/upl ... 2-2019.pdf
June 26 deck : http://www.artberman.com/wp-content/upl ... 6-2019.pdf
July deck : http://www.artberman.com/wp-content/upl ... 4-2019.pdf
In the July slide 9 my recollection of rig counts was in fact correct. However June slide 7 indicates gas supply rising. Something odd is going on, most likely either individual wells becoming more productive, or well preferentially targetting gas vs oil (which seems unlikely). Looking at your link Rystad say horizontal section length is increasing for the better wells, drilled by the more savvy & well-funded players (who presumably are keen to show their newly purchased assets were a good move). But as you say decline rates may also be higher
July slide 3 is the regular slide, and it shows pricing in the sweet spot in the middle. Trump is on a roll trying to find his sweet spot between pandering to redneck 'bash China' voters and not tipping US into a recession, and keeping oil prices low. Every time he bullies the Fed into easing monetary policy he then ups the ante on China tariffs. You'd think the Fed would have learnt by now ! A lot of global macro indicators are edging towards bad times being ahead, and industrial contraction (or decelleration) depresses oil price which in turn depresses shale activity.
June 26 slide 11 shows DUC stock flattening. And slide 12 shows about half the shale boys were cash flow positive. Since cash is king and interest rates are now falling that implies more shale wells will be coming for a while.
My instincts are that Berman's dumbass call in July slide 10 is more right than the US EIA. But if money is at 0% and if the political environment favours shale under a second term Trump then maybe the US EIA are correct.
Are we at - or near - peak US shale ?
Spasmodicus put up some relevant points in his [#225706 Postby spasmodicus » May 31st, 2019, 9:02 am].