A time series analysis of oil production, rig count and crude oil price: Evidence from six U.S. oil producing regions

Nicholas Apergis, Bradley T. Ewing, James E. Payne

Research output: Contribution to journalArticle

13 Scopus citations

Abstract

With oil company valuations tied in part to oil well drilling to replace reserves at a rate that exceeds production, understanding the dynamic relationship between the development of oil rigs and oil production is important. This study focuses on the Bakken, Eagle Ford, Haynesville, Marcellus, Niobrara, and Permian regions, historically the six major oil producing regions in the U.S. Specifically, we apply time series econometric techniques of unit root, cointegration, and error correction modeling to examine the dynamic relationship among oil production, rig count, and crude oil prices for each of these six U.S. oil producing regions. The results of this study highlight the importance of identifying the regional variations in oil production, rig count, and crude oil prices and their interactions in both the valuation of oil firms and capital investment projects as it pertains to oil drilling activity.

Original languageEnglish
Pages (from-to)339-349
Number of pages11
JournalEnergy
Volume97
DOIs
StatePublished - Feb 15 2016

Keywords

  • Crude oil
  • Crude oil price
  • Exploration and production
  • Rig count
  • Time series analysis

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