Featured in E&P Magazine: Are You Ready for the Recovery?
05 Aug 2020
Shutting in an oil and gas well is routine, as is restarting it. What is anything but routine is leaving the well shut in for a prolonged period while grappling with a pandemic-fueled global economic recession that clobbers both market price and demand with no end in sight.
While many wells returned to production in certain basins when prices rose from their abyss in May and June, many wells in other basins did not and will not until COVID-19 recedes in the U.S. and economic activity is sufficient to sustain higher oil and gas prices.
That might not happen until 2021, when it is hoped that a vaccine will be available and the U.S. Energy Information Administration expects WTI’s price to average $43.88/bbl for the year. That means that thousands of unconventional wells could be shut in for months or even more than a year-the longest stretch since the start of the shale revolution. But it’s not just producers that are affected. When prices crashed, midstream operators had to react quickly as well.