US shale gas production outlook based on well roll-out rate scenarios

• Future gas production output from US shale plays up to 2025 is modeled.
• Three distinct drilling scenarios are assumed for the six major US shale plays.
• Cumulative US production output from the combined shale plays is quantified.
• Bottom-up model is compared with top-down NEMS forecasts.
• Our scenario models indicate that steady growth of US shale gas supply cannot be ascertained.

This study models the uncertainty range in the future gas production output from US shale plays up to 2025. The future spread in gas output in our models follows from variations in the number of wells that will be drilled according to three distinct scenarios. Each scenario assumes a well development plan for the six major shale plays over the studied period and then quantifies the cumulative US production output from the combined shale plays. We compare the bottom-up model results with other model projections for future US shale gas output, including the top-down shale gas production forecasts by the US National Energy Modeling System (NEMS). The remarkable growth of North American gas output from unconventional resources has been highlighted in numerous industry reports and government publications, but what has remained relatively underexposed is the deterioration of economic margins due to the failure to predict the gas price decline in the North American market. The past development record of North America’s shale gas resources suggests that security of future gas supplies seems ensured, but here we develop a contrarian view. Our scenario models take into account the effect of recent declines in gas rig counts and decline in gas well completions due to the depressed gas prices. A scenario with declining shale gas output – one of three scenarios considered – cannot be excluded as being unlikely to occur, which means the future security of US gas supply that assumes a steady growth of shale gas supply cannot be ascertained at present.