Permian production decelerates while waiting for pipelines

The Permian basin’s rapid production growth is showing signs of deceleration, according to ESAI Energy’s recent North America Watch. An evaluation of shale producers finds that while Permian basin operating costs in 2Q have fallen approximately 6% on average from this time last year, overall full-cycle breakeven costs are roughly 30% higher, due to increased capital spending. ESAI Energy analyst, Elisabeth Murphy, explains, “Acreage consolidation is key for achieving scale, and will be critical to some producers’ bottom lines, but it comes at a cost. Permian acreage can be expensive”.