A nice feature of our short term forecast model, is we can run it backwards. That is, we can input a production profile and see the number of completions/crews necessary to achieve that result. This ability will be a key part of our Production Studio dashboard which is under development and will release to Hyperion customers this year. In the meantime, we are using this capability as a part of our ongoing research.
For this article we have estimated the number of frac crews necessary to keep production flat from current levels to offset decline rates over time for each well. This analysis is performed at the sub regional level and our results are aggregated and displayed at the total L48 level. This is an important caveat because wells in each sub region behave very differently, meaning that while this analysis is valid given the current distribution of crews, a change in the distribution will impact the total breakeven level differently for different sub regions.
The number of breakeven frac crews required to keep nat gas production constant is currently 227 frac crews for the Lower 48 US based on the Hyperion short-term forecast model. Lower 48 frac crews are at 233 as of 6/29/2024. Stay tuned for our next research article where we explore sub regional breakevens.