Daily GPI / E&P / NGI The Weekly Gas Market Report / Production

Production Slowdown Out of Unconventional Plays to Continue Into July, EIA Says

The downward trend in natural gas and oil production that has plagued the nation's seven largest unconventional plays since last autumn will continue next month, according to the Energy Information Administration (EIA).

Total natural gas production out of the Bakken, Eagle Ford, Haynesville, Marcellus, Niobrara, Permian and Utica will be an estimated 45.75 Bcf/d in July, a 476 MMcf/d decline compared with an estimated 46.23 Bcf/d this month, EIA said in its latest Drilling Productivity Report (DPR).

The Eagle Ford Shale will experience the biggest decline in natural gas production, with EIA forecasting 6.11 Bcf/d in July, down 211 MMcf/d from 6.32 Bcf/d this month, but declines are forecast in all seven of the plays analyzed in the DPR.

EIA expects 17.46 Bcf/d out of the Marcellus Shale next month, compared with 17.51 Bcf/d in June. The agency also expects to see month-to-month declines in the Bakken Shale (1.64 Bcf/d, compared with 1.67 Bcf/d in June), the Haynesville Shale (5.93 Bcf/d, compared with 5.98 Bcf/d), the Niobrara formation (4.04 Bcf/d, compared with 4.11 Bcf/d) the Permian Basin (6.91 Bcf/d, compared with 6.97 Bcf/d), and a marginal decrease in the Utica Shale (3.67 Bcf/d, down 4 MMcf/d compared with June).

Oil production is also projected to continue its months-long decline. EIA forecast oil production out of the Bakken in July to be 1.01 million b/d, compared with 1.04 million b/d in June, with declines also expected in the Eagle Ford (1.15 million b/d, compared to 1.22 million b/d), Niobrara (384,000 b/d, compared to 398,000 b/d) and Permian (2.01 million b/d, compared to 2.02 million b/d). Marginal declines are also expected in the Haynesville and Marcellus, with unchanged production from the Utica.

The productivity of new oil wells in the plays is expected to remain nearly unchanged in July. On a rig-weighted average basis, oil production per rig will be 557 b/d, compared to 564 b/d this month, according to the DPR. At the same time, new-well gas production per rig in the plays will remain at 2.90 MMcf/d in July, as it is expected to be this month.

EIA released the first DPR in October 2013 (see Shale Daily, Oct. 22, 2013) but didn't forecast month-to-month declines until last September (see Shale Daily, Sept. 15, 2015April 13, 2015). Since then, the agency's production forecasts have followed a steady downward trend (see Daily GPIMay 18).

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