The wheels on the U.S. shale boom are coming to a screeching halt as sharp declines in rigs across the plays are just beginning to be felt.
Shale oil output in the U.S. is expected to post the slowest growth in more than four years in April, the Energy Information Administration (EIA) said in a March 9 report.
Focusing on the seven most prolific shale plays, the EIA estimates oil production will rise to 5.6 million barrels a day (MMbbl/d) in April. This increase over March of less than 300 bbl/d would be the smallest projected since February 2011.
Oil production from the two biggest shale plays is expected to decline in April. Eagle Ford production will drop 10 Mbbl/d, while Bakken production will be down by 8 Mbbl/d.
Production in the Niobrara Shale will shrink as well in April, falling by 5 Mbbl/d.
Offsetting the declines, production in the Permian Basin is projected to grow 21 Mbbl/d in April.
The Eagle Ford maintained drilling levels longer than other basins, but the downturn arrived in force during the first quarter of 2015, according to a Hart Energy Market Intelligence report.
The report said some operators on long-term contracts are finding it cheaper to stack a rig and pay the original rig rate rather than add new wells. Others are buying out contracts and letting rigs go, or negotiating to extend the term at lower pricing.
Contractors expect rig rates to drop another 20% during the next 90 days as rigs stack out in the Eagle Ford.
In the Bakken, pressure pumping contractors think activity levels have bottomed in the play, another Hart Energy Market Intelligence report said. Contractors are now at cash cost and stacking out equipment or letting crews go in the play.
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