U.S. oil output from seven major shale formations is expected to rise by about 70,000 barrels per day (bbl/d) in July to a record 8.52 million bbl/d, the U.S. Energy Information Administration (EIA) said in its monthly drilling productivity report on June 17.
The largest change is forecast in the Permian Basin of Texas and New Mexico, where output is expected to climb by 55,000 bbl/d to a fresh peak at 4.23 million bbl/d in July.
Production in North Dakota and Montana's Bakken shale basin is also expected to climb by 11,000 bpd to a record 1.44 million bpd, the data showed. Output from the nearby Niobrara basin is expected to rise by 10,000 bpd to a record high of nearly 730,000 bpd.
A shale revolution and production increases particularly from the Permian Basin and the Bakken have helped make the United States the biggest crude oil producer in the world, ahead of Saudi Arabia and Russia.
However, the EIA has revised lower its total U.S. crude oil production growth forecast. It said last week in a monthly report that output will rise 1.36 million bbl/d to 12.32 million bbl/d in 2019, 140,000 bbl/d less than previously forecast. That will top the current all-time high of 10.96 million bbl/d set in 2018.
The rig count, an early indicator of future output, has declined over the past six months as independent exploration and production companies cut spending on new drilling as they focus more on earnings growth instead of increased output.
More than half the total U.S. oil rigs are in the Permian Basin, the biggest U.S. shale oil play, where active units decreased by five last week to 441, the lowest since March 2018, according to data from Baker Hughes, a GE company.
The EIA said in the June 17 report that producers drilled 1,318 oil and gas wells, the least since April 2018 and completed 1,395 in the biggest shale basins in May, leaving total drilled but uncompleted wells down 77 at 8,283, according to data going back to December 2013. That was the biggest decline in drilled but uncompleted wells since March 2018 when they fell by 107.
Separately, U.S. natural gas output was projected to increase to a record 81.4 billion cubic feet per day (Bcf/d) in July, the EIA said. That would be up 0.8 Bcf/d over the June forecast and mark a record 18th consecutive monthly increase. A year ago in July, output was 69.5 Bcf/d.
The EIA projected gas output would increase in most of the big shale basins in July, except Anadarko in Oklahoma and Texas and Eagle Ford in Texas.
Output in the Appalachia region in Pennsylvania, Ohio and West Virginia, the nation's biggest shale gas play, was set to rise over 0.3 Bcf/d to a record 32.4 Bcf/d in July. Appalachia production was 28.0 Bcf/d in July a year ago.
Recommended Reading
Kodiak Gas Services Closes $850MM Deal for CSI Compressco
2024-04-02 - Kodiak Gas Services’ acquisition of CSI Compressco was financed as an all-equity transaction valued at approximately $854 million, including assumption of $619 million in debt.
Permian Resources Adds More Delaware Basin Acreage
2024-05-07 - Permian Resources also reported its integration of Earthstone Energy’s assets is ahead of schedule and raised expected annual synergies from the deal.
Riley Exploration Permian Closes Delaware Basin Bolt-on
2024-05-08 - Riley Exploration Permian said it added 13,900 acres and up to 25 net locations in Eddy County, New Mexico.
Comstock Adds Four Whopper Wildcats; Takes Western Haynesville to 450K
2024-05-01 - Comstock Resources' four newest wells, which IP’ed at more than 35 MMcf/d, were landed at up to 19,400 feet total vertical depth.
Magnolia Bolts-on 27,000 Acres in South Texas’ Giddings Field
2024-05-09 - Magnolia Oil & Gas said it paid $125 million to a private operator to acquire the acreage, which has minimal production.