By Velda Addison, Hart Energy

If the shale production forecast from the U.S. Energy Information Administration (EIA) turns out to be true, the year 2016 will be off to a rough start.

But that could already be the case as the upstream sector works to survive the lingering downturn that has left hundreds of thousands of people without jobs, cut into profits and slowed E&P activity to a crawl in many areas. U.S. oil and gas production from most of the country’s larger shale plays is expected to fall again in February.

Data released Jan. 11 by the EIA showed that oil production from the seven regions tracked in its Drilling Productivity Report is predicted to fall by 116,000 barrels per day (bbl/d) from about 4.95 million barrels per day (MMbbl/d) in January to about 4.83 MMbbl/d in February.

“The decline would take U.S. shale output to 638,000 [bbl/d] below the March 2015 peak, a far slower drop than many analysts had expected just a few months ago,” Reuters reported. “Shale firms’ resilience in the face of crashing crude oil markets has added to the selloff, pushing prices to near 13-year lows this week.”

A barrel of West Texas Intermediate (WTI) crude was trading down about 3.7% at $30.26 at noon (CST) Jan. 12. The WTI spot price for crude around this time last year was more than $46, compared to more than $91 in January 2014.

The greatest production drop is expected in the Eagle Ford, where oil production could decrease by 72,000 bbl/d to about 1.15 MMbbl/d next month. In February 2015, oil companies were producing more than 1.6 MMbbl/d from the Eagle Ford.

The stories are the same for the Bakken and the Niobrara regions, which could experience production losses in February 2016. The EIA estimated oil production in the two regions will each fall by more than 20,000 bbl/d to 1.10 MMbbl/d and 371,000 bbl/d, respectively. In February 2015, the Bakken produced about 1.2 MMbbl/d while operators pumped more than 400,000 bbl/d from the Niobrara.

In the Marcellus, oil production could fall by 2,000 bbl/d to 48,000 bbl/d in February, while oil production in the Haynesville could drop by 1,000 bbl/d to 51,000 bbl/d in February.

However, some regions are expected to see some production growth next month. These include the nation’s biggest oil-producing region, the Permian, where the EIA said oil production could grow by 5,000 bbl/d to 2.04 MMbbl/d next month. Production could also inch up by 1,000 bbl/d to 79,000 bbl/d in the Utica.

The EIA believes a handful of regions will also buck the trend in terms of gas production.

The Utica, which lies under parts of the northeastern U.S. and parts of Canada, leads the small pack of three. Here, the EIA said gas production could increase by 43 million cubic feet per day (MMcf/d) to about 3.35 Bcf/d. A 16 MMcf/d increase is expected to boost gas production to 6.23 Bcf/d in the Haynesville, while a 1 MMcf/d increase could be in in store for the Permian, which would boost its gas output to about 6.9 Bcf/d.

But the gains are not likely to offset anticipated production declines elsewhere, including in the Marcellus where production could fall by 225 MMcf/d to 15.22 Bcf/d. The forecast also show less gas production from the Eagle Ford, down 140 MMcf/d to about 6.46 Bcf/d; Niobrara, down 76 MMcf/d to about 4.10 Bcf/d; and in the Bakken, down 24 MMcf/d to about 1.56 Bcf/d in February.

In all, the EIA reported that gas production could drop by 405 million cubic feet per day (MMcf/d) from an estimated 44.13 Bcf/d in January to 43.72 Bcf/d in February.

Only time will tell whether the forecast will becomes reality. If it does, let’s hope the production slowdown will move the industry closer to ending this dismal chapter in oil and gas history.

Velda Addison can be reached at