Among the key factors defining the transformation of the US energy landscape in 2014 are two unconventional energy plays each making over 1 Mbod, growth in liquids production vs gas, unconventional play breakeven results and deepwater permitting and production forecasts.

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Supply Transformation Economics

Once an unconventional energy play is delineated, resource play development is generally characterized by offering lower risk profiles than many conventional opportunities, and providing greater scalability for aggressive, rapid production growth. However, the range in breakeven economics for domestic tight-oil investments can differ significantly by play, and even within a play. Insight gathered using IHS tools such as IHS Fekete and IHS Enerdeq Browser combined with the forward-looking commercial analysis from IHS North America Supply Analytics bring together the breakeven points for selected unconventional energy plays in the US (see map) and aid operators in their search for the most prospective acreage within resource plays.

Two Plays Leading the Charge

Unconventional oil development has led the resurgence in U.S. oil production. Two plays - the Bakken Shale in North Dakota's Williston Basin, and the Eagle Ford Shale in Texas's Gulf Coast Basin - have provided the most significant volumes and are each producing more than 1,000,000 b/d. Exploration and development continue in prospective basins across the continent, although no play has yet yielded the commercial opportunities for growth found in the Bakken or Eagle Ford. (see map)

Transforming Reserve Compositions

The unconventional energy revolution has not only transformed the supply outlook in the United States, but has also transformed the oil and gas companies developing this large resource. As the oil-to-gas price ratio has remained at historically high levels, operators have been allocating a larger proportion of capital expenditures toward liquid weighted unconventional plays. As a result, we've seen a dramatic shift in the reserve and production composition for many producers in a very short period of time. (see map)

Sub-Salt Miocene and Lower Tertiary Plays Fuel Growth in the Deepwater GOM

Analysis of permitting activity in the Gulf of Mexico (GOM) suggests the Miocene and the overlapping Miocene Sub-Salt and Lower Tertiary play areas remain the hot spots for permitting activity in the post-Macondo era, with other play areas seeing only sporadic permitting activity. Examination of new well permit submissions across plays reveals a concentration of planned activity in the Miocene and the overlapping Miocene Sub-Salt and Lower Tertiary plays, accounting for close to 90% of total permits submitted in deepwater GOM. The decline in permitting submissions in the Miocene play is of concern, as it is responsible for the bulk of current production from the GOM deepwater and might benefit from both infill drilling and offset exploration in order to offset field decline. The continued focus on the Lower Tertiary and Miocene sub-salt portends significant longer-term growth and IHS expects future oil production from new developments to reach > 1.5 mmb/d over the next 10 years. Download US Unconventional Energy and Deepwater Map

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This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.