Oiland gas producers in the Lower 48 have slashed more than $150 billion fromtheir capital expenditures budgets for 2016 and 2017 as a result of the oil andgas price collapse, according to Wood Mackenzie.
Accordingto the firm, a total of $370 billion in CapEx has been slashed by companiesworldwide, but the total cut in the Lower 48 is three times that of any othercountry.
Thesize of the cuts, Wood Mackenzie said, is due to shorter lead times and theless capital-intensive nature of shale oil and gas plays in the U.S. In spiteof being less capital intensive, it was the unconventional plays that took thelargest beating when it came to budget cutbacks.
"Theplays that saw the highest proportion of their capital expenditure cut were inthe Eagle Ford and the Bakken," said Jeanie Oudin, Wood Mackenzie seniorresearch manager for the Lower 48. "That's because the two plays were infull-scale development, with most operators' acreage held by production at thetime oil prices began to fall, allowing for a more responsive slowdown inactivity."
WoodMackenzie said the Bakken and Eagle Ford, by themselves, counted for 36% ofU.S. CapEx cuts spanning the final quarter of 2014 through the second quarterof 2016.
Theunconventional plays in the prolific Permian Basin, Wood Mackenzie said,experienced much smaller declines in spending and drilling activity. With somany rigs already in the region and the potential of exploiting stacked plays,drillers have been less willing to leave the region.
"Combinedwith our outlook for Permian production growth, this is extremely positive forMidland and Delaware stakeholders," Oudin said. "The Midland andDelaware basins hold the largest number of undrilled, low-cost tight oillocations in the Lower 48. No other region comes close."