An enhanced completion design was behind Devon Energy Inc.’s (NYSE: DVN) “record-setting” Meramac well in the Stack play that flowed at a peak 24-hour rate of 6,000 barrels of oil equivalent per day (boe/d), mostly oil.

The Oklahoma City-based company said it expects to recover more than 2 MMboe during the lifetime of its Privott 17-H well, which was drilled with a 10,000-ft lateral. Key to the company’s success was stimulated rock volume around the wellbore with a new proprietary completion design.

Devon COO Tony Vaughn called the achievement another example of the company’s upstream technology leadership. “Looking ahead, we expect to continue to build operational momentum in the Stack as we transition our activity to multizone development drilling that will drive additional efficiency gains and maximize the value of our resource,” Vaughn said in a July 11 statement.

Such strides build confidence in sustained U.S. oil production growth, aided in large part by technology gains. Operators are using technologies such as predictive analytics, microseismic and far-field and near-wellbore diverters to pump more proppant for longer laterals and drill deeper wells.

However, as operators use these technology advancements to increase their odds of surviving a sub-$50/bbl world, the industry’s innovation is also putting pressure on oil prices, analysts say.

“The use of advanced analytics along with other technology enhancements is accelerating oil supply-cost reductions. Precision targeting allows E&Ps to land laterals in better rock,” analysts at Barclays said in a note issued earlier in July. “This innovation, combined with more intensive completions, results in better wells, lower costs and expanding inventory.”

Barclays added that it believes U.S. oil production growth will “surprise to the upside again.”

“The impact of technological innovation on oil and gas drilling is often overlooked by E&P investors,” the firm said. “We believe improved well results, flattish well costs [per lateral foot] and rising per-well productivity will lead U.S. oil volumes higher and put downward pressure on long-term oil prices.”

The sentiment is backed by thoughts that investors may focus more on technology development, and companies—seeing the gains of its peers—will strive to replicate the successes, come close or do better.

Barclays also highlighted how Devon and EOG Resources Inc. (NYSE: EOG) have both improved well results.

“Devon recently showed that its well results have improved more than 450% since 2012 and EOG has included an illustration in its investor materials that show a near tripling in production per well [adjusted for lateral lengths] in the Delaware Wolfcamp since 2013. While industry drilling data is not as dramatic as these examples we note that the leaders in implementing emerging technology will be emulated by peers in the near future,” Barclays said.

EOG has shifted focus to its premium assets, wells capable of earning at least a 30% direct after-tax rate of return at $40 crude oil and $2.50 natural gas prices. Its strategy appears to be meeting expectations, but the company is still working to improve.

Longer laterals, precision targeting and advanced completions helped to push EOG’s first-quarter 2017 crude oil volumes to a 315,000 bbl/d company record. The company has said that applying unconventional techniques to conventional reservoirs could result in additional growth.

“EOG has articulated its strategy well and has shown field-level well results about 2x that of peers while DVN has more than quintupled production rates over the past four to five years and delivered corporate average production rates results about 50% above the ‘average’ large producer,” Barclays said.

Higher production rates are pushing future estimates higher.

Just this week the U.S. Energy Information Administration (EIA) said it expects the seven major shale basins it tracks to produce 5.472 MMbbl/d in July and 5.585 MMbbl/d in August. Gas production is also forecast to rise, moving from about 52 billion cubic feet per day (Bcf/d) in July to about 52.9 Bcf/d forecast for August.

Oil production from the Permian is expected to jump by 64Mbbl/d in August to about 2.535 MMbbl/d, while gas production in the Marcellus—the top gas play in the nation—is forecast to rise by 201 MMcf/d to about 19.8 Bcf/d, according to information from the EIA’s latest Drilling Productivity report.

The EIA forecast U.S. oil production to average about 9.3 MMbbl/d in 2017, up from the estimated 8.9 MMbbl/d in 2016. Production is expected to continue growing next year, possibly reaching about 9.9 MMbbl/d.

Barclays estimated a 10% improvement in per-well production rates would increase growth further.

Growth has come despite oil prices remaining below $50/bbl. The morning of July 20 Brent futures were at $49.62/bbl, while West Texas Intermediate (WTI) crude futures were at $47.01/bbl.

“While we expect second-quarter earnings calls to indicate that E&Ps continue to execute well, we continue to be concerned about subpar full-cycle returns on new investments, the potentially bearish impact of rising U.S. oil volumes on oil prices and extended valuations,” Barclays said. “We remain negative on the sector.”

Barclays lowered its WTI oil price used in its E&P forecasts to between $48/bbl to $52.20/bbl for 2017-2018.

Velda Addison can be reached at