‘Shell could exceed its target of doubling US onshore output’

Bloomberg

Shale oil hasn’t always been Royal Dutch Shell Plc’s best friend, but they’re working on the relationship. Shell is said to have bid, with partner Blackstone Group LP, on a portfolio of US shale assets BHP Billiton Ltd. wants to sell for about $10 billion. If it wins, the Anglo-Dutch oil major could exceed its goal of doubling its American onshore output, according to JPMorgan Chase & Co. That would boost the unit’s free cash flow — currently on track to grow by $2 billion by 2025 — and turn around a shale portfolio that is currently “mid-lower ranked,” analysts from the bank including Christyan Malek said in a report.
At the heart of Shell’s shale problem has been the lack of a coherent strategy, according to the report. It has irregularly
acquired various bits of US acreage, including a large
stake in the low-cost and highly desirable Permian.
In the Permian’s Delaware basin Shell was pumping fewer than 100,000 barrels a day per 1,000 feet (300 meters) of well length in the first 30 days of production — about 20 percent lower than the industry average at the time. In contrast, shale specialist EOG Resources Inc.’s wells in the same area were about
50 percent more productive.