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Production Declines in Big Seven Plays to Continue Next Month, EIA Says

Oil and natural gas production from the nation's seven largest unconventional plays, which has been trending lower for months, is expected to decline once again in December, according to data from the Energy Information Administration (EIA).

Total oil production out of the Bakken, Eagle Ford, Haynesville, Marcellus, Niobrara, Permian and Utica plays will be an estimated 4.49 million b/d in December, down from an estimated 4.52 million b/d this month, EIA said in its latest Drilling Productivity Report (DPR), which was released Monday.

EIA forecast December oil production out of the Permian (2.07 million b/d) and Niobrara (404,000 b/d) to be up slightly compared with November, and oil production out of the Marcellus (38,000 b/d) and Haynesville (43,000 b/d) to be unchanged. But the estimated total was dragged down by declines expected in the Bakken (918,000 b/d, compared with 932,000 in November), Eagle Ford (978,000 b/d, compared with 1.01 million b/d) and Utica (52,000 b/d, compared with 54,000 b/d).

Natural gas production from the Big Seven is expected to fall to 46.96 Bcf/d, compared with 47.05 Bcf/d this month. As it has several times this year, EIA said it expects the biggest decline in gas production to be in the Eagle Ford, with the agency forecasting 5.56 Bcf/d in December, down 196 MMcf/d from 5.76 Bcf/d this month.

Declines are also expected in the Bakken (1.60 Bcf/d, compared with 1.61 Bcf/d), Haynesville (5.92 Bcf/d, compared with 5.94 Bcf/d), Niobrara (4.16 Bcf/d, compared with 4.19 Bcf/d) and Utica (4.09 Bcf/d, compared with 4.11 Bcf/d). Two plays should see increases in natural gas production next month, EIA said: the Marcellus (18.30 Bcf/d, compared with 18.17 Bcf/d in November) and the Permian (7.32 Bcf, compared with 7.27 Bcf/d).

EIA released its first DPR in October 2013,but didn't forecast month-to-month production declines until September 2015. Since then, the agency's production forecasts have followed a steady downward trend. The seven regions during 2011-2014 accounted for 92% of domestic oil production growth and all gas production growth.

Drilled but uncompleted (DUC) well counts as of the end of October totaled 4,232 in the four oil-dominant regions -- Permian, Bakken, Eagle Ford and Niobrara -- an increase of 48 from September, EIA said. There also were 922 DUCs in the three gas-dominant regions -- Haynesville, Marcellus and Utica -- a decline of 2.

The productivity of new oil wells in the plays is expected to decline slightly in December. On a rig-weighted average basis, oil production per rig will be 643 b/d, compared to 649 b/d this month, according to the DPR. New-well gas production per rig in the plays will also increase, from 3.00 MMcf/d in November to 3.12 MMcf/d in December, EIA said.

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