The shale revolution has reduced the US oil dependency by 2.This influx caused a collapse of prices with a significant impact on development activities. Yet, shale production has proved to be resilient with a slow and delayed decline compared to the dramatic reduction in drilling and fracturing. Using an in-house model, Total inferred that shale oil resilience relies on :
large portfolio of wells
improvement in operational efficiency
increase in reserves per well boosted by completion technology and identification of sweet spots.
Maintaining a production plateau requires a "critical activity" that declines with the number of wells and technology improvements. Consequently, the critical activity at the end of a development can be 5 to 10 times less than during the ramp-up phase. The model was used to assess the resilience of two major American oil plays: Bakken and Eagle Ford. Using the past well schedule, the actual production history has been matched by calculating the best decline curve per well. The economic resilience of the plays has then been assessed by extending the production period over 5 years (2015-2020) in a durable weak oil price environment and using three different strategies. The model highlights that when oil prices are high, the resources need to be developed at a fast pace to feed a well portfolio paid by a fast return on investment. In case of decrease in prices, the portfolio will rest on a declining or a moderate development strategy to maintain profits. Thanks to the flexibility of the means (rapid mobilization and demobilization of rigs), the development can be resumed as soon as prices recover. However, a systematic "stop and go" strategy can be damaging to human resources and loss of skills. Consequently, reducing breakeven prices through technology remains the best guarantee to perpetuate the economic efficiency.
