Exploration and production companies focused on the U.S. lower 48—particularly those with production in the Permian Basin—expect the highest year-on-year increase in capital spending of any region in the world, according to Wood Mackenzie’s analysis of 2017 guidance issued during the Q4 reporting.
U.S.-focused producers, in aggregate, are budgeting a 60 per cent year-on-year capex spend increase in 2017. This compares to a year-on-year budget increase for companies with a Canadian focus of just 28 per cent.
In aggregate, the 119 global companies Wood Mackenzie surveyed for the report plan to spend US$25 billion more in 2017, which is a year-on-year increase of 11 percent.
The U.S.-focused capital spend jump accounts for US$15 billion of that total $25 billion total investment.
From a production perspective, the 98 companies that announced production guidance for 2017 are expecting to add a combined 1 million boe/d more in 2017 than in 2016 (including acquisitions).
The U.S-focused group accounts for the bulk of this increased production, with 800,000 boe/d.
“For many companies, 2017 will be about focusing on returning to growth,” Wood Mackenzie said in a statement.
“Among those companies that will increase spend are tight oil specialists Pioneer and EOG, underlining the attractiveness of the Lower 48’s shale plays, even at current prices.”
Internationally-focused companies, however, have forecast overall production declines this year. Those that are cutting their capex spend are “among the largest” in the sector.
“We surveyed IOCs [international oil companies], NOCs [national oil companies], large, medium and small-cap companies. It's a broad survey, designed to give a snapshot of activity across the sector,” Wood Mackenzie spokeswoman Anthea Pit said in an email.