Wood Mac's breakeven analysis of more than 800 individual assets in the United States' Lower 48 has revealed dramatic variations in the viability of company asset bases and sub-plays and, while the majority of production is not at risk in the long term, the consultancy has warned that cash flow and funding limitations could impact activity.

"Experts have repeatedly underestimated unconventionals," Wood Mac senior analyst Lower 48 upstream research Cody Rice said.

"While low prices certainly hurt project economics, reports of the demise of unconventionals have been greatly exaggerated."

Wood Mac expects oil and condensate production in the Lower 48 to grow throughout next year, but says the pace of growth will slow considerably from the second half of this year.

Tight oil production grew by 1.2 million barrels a day last year and the consultancy expects it to grow 673,000bpd this year and 425,000bpd next year.

"We forecast tight oil production will reach 7.5 million barrels a day in 2020, but the growth rate has clearly decelerated," Rice said.

To back up its forecast, Wood Mac cited three distinct areas (sub-plays): Springer (Mid-Con), Karnes Trough (Eagle Ford) and Nesson Anticline (Bakken) which generate at least a 10% internal rate of return (IRR) at a $US50/barrel flat real West Texas Intermediate price.

The 35 remaining top oil-weighted sub-plays need an average drilling and completion (D&C) cost reduction of 30% to be economic at US$50 per barrel WTI.

Wood Mackenzie believes reductions of this magnitude are achievable as some companies have already announced them. However, the most prolific sub-plays, including the Parshall Sanish (Bakken) and SCOOP Woodford (Mid-Con), require less than a 5% cost reduction.

While North American Independents had 20% more of their liquids production breakeven under $60/bbl than majors and national oil companies in the Lower 48, Wood Mac said that flowing production - which is important for cash flow - accounts for 75% of the majors' oil production and 83% of their gas production in 2015.

"In the three marquee oil plays (the Bakken, Eagle Ford and Wolfcamp), Independents dominate remaining resources with 12 billion barrels identified on an entitlement basis," the consultancy said.

Wood Mac expects the Lower 48 M&A market to remain depressed until participants reach consensus on an oil price and appropriate financial metrics.

"Deal activity has declined dramatically, with associated spend in the first quarter of 2015 85% lower than the fourth quarter of 2014," the consultancy said.

"We do expect activity to pick up in the second half of 2015 but given the appetite for the best assets, bargain hunting will be difficult."