[Editor's note: This story was updated at 5 p.m. CT Jan. 21.]
U.S. oil and natural gas output in major shale formations is expected to rise by the smallest in about a year in February to record highs, the U.S. Energy Information Administration (EIA) said Jan. 21, as producers pull back on new drilling.
Shale oil output is expected to rise by about 22,000 barrels per day (bbl/d) in February to about 9.2 million bbl/d, which would be the smallest monthly increase since production declined in February 2019.
U.S. gas output in the big shale basins was projected to increase less than 0.1 billion cubic feet per day (Bcf/d) to a record 86 Bcf/d, its smallest monthly increase since a drop in January 2019.
The Permian and Bakken regions have been the biggest drivers of a shale boom that helped make the U.S. the biggest oil producer in the world, ahead of Saudi Arabia and Russia.
However, the rate of growth has slowed as independent producers cut spending on new drilling and completions to focus more on improving earnings results.
Oil output at the largest formation, the Permian Basin of Texas and New Mexico, is expected to rise 45,000 bbl/d to a record 4.8 million bbl/d. That would be the smallest increase since June 2019, the EIA said in its monthly forecast.
Crude production from North Dakota and Montana's Bakken region is expected to rise by about 5,000 bbl/d to a fresh peak of about 1.53 million bbl/d.
Low U.S. gas prices are also expected to prompt companies to keep cutting spending on new drilling.
Oil production is forecast to decline in the Eagle Ford, Niobrara and Anadarko basins, the EIA said.
Meanwhile, U.S. gas output in the Appalachia region, the biggest U.S. shale gas formation, was set to decline less than 0.1 Bcf/d to 33.3 Bcf/d in February from 33.4 Bcf/d in January. That would be the first time gas production declined for two successive months since October 2016.
Most of the increase in gas production was in the Permian, where output is expected to rise 0.2 Bcf/d to a record 16.8 Bcf/d in February.
EIA said producers drilled 1,036 wells—the least since June 2017—and completed 1,086 in the biggest shale basins in December, leaving total drilled but uncompleted (DUC) wells down 50 to 7,573, the lowest since October 2018.
Laredo Petroleum remains “focused on executing similar, reasonably-priced bolt-on acquisitions around our core position in Howard County,” CEO Jason Pigott says.
Cracks have begun to show in the traditional performance metrics for executive compensation in the oil and gas industry, and there’s a growing push to reconsider them in the new environment.
Martin Midstream’s founder, Ruben Martin, will retire as president and CEO on Dec. 31, but remain as board chairman and will continue to be actively involved in its business development.