Can the unconventional-resource revolution get any better? Absolutely, according to Tom Petrie, vice chairman, Bank of America Merrill Lynch.

"The greater thing about the unconventional revolution is that it will become the 'new conventional' revolution as it rotates to using the same drilling and completion techniques in conventional formations," Petrie says.

He forecasts that the application of horizontal-wellbore and multi-stage fracture-stimulation to old conventional oil fields may contribute a new 3 million barrels to daily U.S. oil production in the coming decade. Petrie addressed attendees at The Oil Council's annual Americas assembly in New York today.

Horizontal drilling and fracing is being used with economic results now in the oily Mississippi Lime and Permian in formations that had been drilled in the past century only vertically.

"The application of horizontal-drilling techniques can work and is working now in conventional reservoirs," Petrie notes. Laterals and fracing "will give new life to conventional, old fields."

That, plus unconventional-resource oil production, such as from the South Texas Eagle Ford and Permian Bone Spring, will contribute to an enviable new U.S. oil-production profile.

"The ability of the U.S. to get back to its 7- or 8 million barrels a day by the end of the decade and potentially to get to a number higher than that is something to contemplate," Petrie says.

As for oil prices, Petrie doesn’t expect Libyan production to fully come back online until 2014 although he estimates half to two thirds of pre-war output will flow in 2012 and 2013.

As for natural gas prices, Petrie favors allowing U.S. producers to export the excess, as their work on shale-gas plays has resulted in an abundance. "I see it as a pressure-relief valve."

Cheniere Energy has U.S. Department of Energy approval to export up to 2 Bcf a day out of its Sabine Pass, Louisiana, import facility; it now needs FERC approval.

Freeport LNG has an application with the DOE to export as well.

"Cheniere began to build the Sabine Pass terminal 10 years ago (upon the idea) that we would be evermore dependent on imported LNG. They built it and almost no one came, as a result of the (new domestic gas supply from the) shale revolution we have today."

Being able to export U.S. gas will provide producers flexibility in getting their gas to markets. "It makes sense (to allow it) and gives the U.S. better connectivity to world markets and world (gas) valuation."

Contact the author, Nissa Darbonne, at ndarbonne@hartenergy.com.