US shale oil production will flatten and slightly decline during the second quarter, PIRA Energy Group of New York said in an Energy Market Recap.
Weak oil prices have dominated fourth-quarter results and the 2015 outlook as oil and natural gas companies slash spending and slow drilling programs and completions.
“The effect of falling prices rippled throughout the production chain, both on an operational and a financial level,” PIRA said, adding that capital expenditure guidance for 2015 for companies that its analysts cover has been 35% lower than 2014 capex on average.
Simultaneously, technology and productivity improvements continued in the fourth quarter 2014, and these improvements are expected to accelerate in 2015.
“The consensus seems to be a target of a 10% reduction in costs from efficiency gains, and a further 20% cost reduction from service price deflation,” PIRA said.
