June 23, 2016
- Eighteen months ago Shell was considering exiting shale plays and focusing on its deepwater and LNG opportunities.
- Shell’s recent analyst day presentations revealed a company that is shifting its long term focus towards shale.
- We think that going forward the offshore drilling rig companies have major long term challenges and investors need to be aware that pre-crash cash flows aren’t coming back.
For the small sliver of global oil production that U.S shale oil actually represents it certainly has been a disruptive force.
Total shale production (there is no significant amount outside of the United States) is currently somewhere around 4.5 million barrels per day.
That is not much more than four percent of total current production which checks in at over 96 million barrels per day.