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Production From Unconventional NatGas Plays to Continue Lower in June, EIA Says

In what has become a familiar refrain, the Energy Information Administration (EIA) said natural gas and oil production from the nation's seven largest unconventional plays is likely to decline next month compared with May figures.

Total natural gas production out of the Bakken, Eagle Ford, Haynesville, Marcellus, Niobrara, Permian and Utica will be an estimated 45.97 Bcf/d in June, a 464 MMcf/d decline compared with an estimated 46.44 Bcf/d this month, EIA said in its latest Drilling Productivity Report (DPR).

The biggest decline in natural gas production is once again expected to come in the Eagle Ford Shale, where EIA is forecasting production of 6.30 Bcf/d in June, down 195 MMcf/d from 6.50 Bcf/d this month, but declines are forecast for six of the seven plays analyzed in the DPR.

EIA expects 17.29 Bcf/d out of the Marcellus Shale next month, compared with 17.35 Bcf/d in May. The agency also expects to see month-to-month declines in the Bakken Shale (1.65 Bcf/d, compared with 1.68 Bcf/d in May), the Haynesville Shale (5.98 Bcf/d, compared with 6.05 Bcf/d), the Niobrara formation (4.11 Bcf/d, compared with 4.19 Bcf/d) and the Permian Basin (6.97 Bcf/d, compared with 7.02 Bcf/d). The Utica Shale is expected to see a marginal increase, EIA said.

Oil production will also be lower in six of the seven basins: the Bakken (1.02 million b/d, compared with from 1.05 million b/d in May), Eagle Ford (1.21 million b/d, compared to 1.27 million b/d), Niobrara (391,000 b/d, compared to 406,000 b/d) and Permian (2.02 million b/d, compared with 2.03 million b/d), along with marginal declines in the Haynesville and Marcellus, and unchanged production from the Utica.

The productivity of new oil wells in the plays is expected to increase slightly in June. On a rig-weighted average basis, oil production per rig will be 575 b/d, compared to 562 b/d this month, according to the DPR. At the same time, new-well gas production per rig in the plays will increase to a combined 3.00 MMcf/d in June, compared to 2.89 MMcf/d this month.

EIA released the first DPR 30 months ago (see Shale DailyOct. 22, 2013) but didn't forecast month-to-month declines until last September (see Shale DailySept. 15, 2015; April 13, 2015). Since then, the agency's production forecasts have followed a steady downward trend (see Shale Daily, April 11; March 7; Feb. 9).

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