USGS Discovers Large Oil & Gas Deposits In Wyoming
The Department of the Interior has announced that the U.S. Geological Survey (USGS) has discovered large oil and gas deposits in the Mowry Composite Total Petroleum System that spans parts of Wyoming, Colorado and Utah. The report estimates large hydrocarbon resources, including 473 million barrels of oil and 27 trillion cubic feet (tcf) of natural gas. That’s multiples higher than the 90 mn barrels of oil and 7.3 tcf of natural gas that the Mowry Composite system has produced since exploration began in the 1950s.
“This new USGS assessment underscores the role of American energy resources in strengthening our energy independence and driving economic development across the West,” said DOI Secretary Doug Burgum.
“Public lands in Southwestern Wyoming hold significant potential, and this science-based evaluation provides critical data to help inform responsible resource management. We Map, Baby, Map to provide updated estimates of recoverable oil and gas and equip decision-makers, communities, and industry with the knowledge they need to support job creation, domestic energy production, and long-term economic growth.”
According to the DOI, an analysis by the Bureau of Ocean Energy Management (BOEM) since 2021 revealed that the Gulf of Mexico holds an additional 1.30 billion barrels of oil equivalent (boe), with total reserves now estimated at 7.04 billion boe, good for a 22.6% increase. In its updated assessment, BOEM evaluated more than 140 oil and gas fields and analyzed more than 37,000 reservoirs across 1,336 fields.
Overall, the BOEM estimates that the Gulf of Mexico harbors 29.59 billion barrels of oil and 54.84 trillion cubic feet of gas of technically recoverable resources in undiscovered fields.
“This new data confirms what we’ve known all along – America is sitting on a treasure trove of energy, and under President Trump’s leadership, we’re unlocking it,” Burgum said in that statement.
Whereas the Trump administration continues to push the ‘‘drill, baby, drill’’ clarion call, U.S. oil executives are singing a different tune. Shielded by anonymity, energy executives blasted Trump’s energy policies in a March survey of 200 oil and gas firms conducted by the Federal Reserve Bank of Dallas.
“The administration’s chaos is a disaster for the commodity markets,” one executive said. ”‘Drill, baby, drill’ is nothing short of a myth and populist rallying cry. Tariff policy is impossible for us to predict and doesn’t have a clear goal. We want more stability.”
Indeed, Trump’s happy-go-lucky mantra has achieved the opposite of its intended effect, with some executives cutting oil production targets in the face of low oil prices.
“The threat of $50 oil prices by the administration has caused our firm to reduce its 2025 and 2026 capital expenditures,” another executive said in the Fed survey. ‘‘Drill, baby, drill’ does not work with $50 per barrel oil. Rigs will get dropped, employment in the oil industry will decrease, and U.S. oil production will decline as it did during COVID-19.”
Previously, Exxon Mobil’s (NYSE:XOM) Upstream President Liam Mallon dismissed predictions that oil output will see a sharp rise under a second Trump term. Meanwhile, Diamondback Energy (NASDAQ:FANG) CEO Travis Stice recently told shareholders that U.S. onshore oil production is likely to decline due to the plunge in crude prices, saying output has already peaked. According to Stice, front-month oil prices are the third cheapest they have been in any quarter since 2004 when adjusted for inflation, excluding 2020 during the pandemic. Diamondback is the Permian Basin’s third-biggest oil producer and the sixth biggest in the continental U.S.
Meanwhile, the U.S. Shale Patch now has to contend with a stronger and more unified OPEC. The cartel’s price war of a decade ago largely failed with breakthroughs in technology and drilling allowing U.S. shale producers to cut costs and remain competitive even at lower oil prices. However, U.S. shale producers are more vulnerable this time around, having recorded rising costs over the past three years. Their bottom-lines are also shrinking amid falling oil prices partly due to the economic fallout from Trump’s tariff policies. According to Reuters, clawing back some market share is one of the motivating factors behind OPEC+ decision to unwind production cuts at a faster-than-expected clip.
Source: Reuters
Meanwhile, there are growing projections that the U.S. Shale Patch could be on the cusp of a protracted decline. According to Goehring & Rozencwajg LLC, U.S. shale output is likely to enter a period of falling output with depletion, and not regulatory overreach or market dynamics, is the chief culprit. Similarly, the EIA has projected that U.S. shale crude output peaked in 2023.
By Alex Kimani for Oilprice.com
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