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Big Seven Plays to Continue Months-Long Production Decline in September, EIA Says

The downward slide of oil and natural gas production from the nation's seven largest unconventional plays will extend into a twelfth month in September, though at a somewhat less pronounced decline, according to data from the Energy Information Administration (EIA).

In its latest Drilling Productivity Report (DPR), which was released Monday, EIA said it expects total oil production out of the Bakken, Eagle Ford, Haynesville, Marcellus, Niobrara, Permian and Utica plays to decline 85,000 b/d in September to 4.47 million b/d, compared with 4.56 million b/d in August.

EIA forecast oil production out of the Bakken Shale in September to be 942,000 b/d, compared with 968,000 b/d in August, with significant declines also expected in the Eagle Ford Shale (1.03 million b/d, compared to 1.08 million b/d) and Niobrara Shale (370,000 b/d, compared to 377,000 b/d). Marginal declines are also expected in the Haynesville and Marcellus shales, while oil production out of the Utica Shale is expected to remain unchanged. Only the Permian Basin is likely to see an increase, with EIA projecting 1.98 million b/d there in September, compared with 1.97 million b/d in August.

For the third month in a row, EIA said it expects the biggest decline in natural gas production in the Eagle Ford, with the agency forecasting 5.59 Bcf/d in September, down 212 MMcf/d from 5.81 Bcf/d this month.

EIA expects 17.81 Bcf/d out of the Marcellus next month, compared with 17.84 Bcf/d in August. The agency also expects to see month-to-month declines in the Bakken (1.54 Bcf/d, compared with 1.57 Bcf/d in August), the Haynesville (5.84 Bcf/d, compared with 5.88 Bcf/d), the Marcellus (17.81 Bcf/d, compared with 17.84 Bcf/d), the Niobrara (34.11 Bcf/d, compared with 4.18 Bcf/d), and the Permian (6.86 Bcf/d, compared with 6.87 Bcf/d). Production is expected to be 3.68 Bcf/d in the Utica, a slight increase from 3.67 Bcf/d in August.

EIA released its first Drilling Productivity Report 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, 2015; April 13, 2015). Since then, the agency's production forecasts have followed a steady downward trend (see Shale Daily, July 19; June 13, May 16).

The productivity of new oil wells in the plays is expected to improve slightly in September. On a rig-weighted average basis, oil production per rig will be 578 b/d, compared to 560 b/d this month, according to the DPR. At the same time, new-well gas production per rig in the plays will decrease slightly, from 2.86 MMcf/d in August to 2.77 MMcf/d in September, EIA said.

Eighteen U.S. land rigs went back to work during the week ending Aug. 12, according to Baker Hughes Inc. (BHI) data, and nne rig left the inland waters for a net U.S. gain of 17 rigs (see Shale Daily, Aug. 12). Fifteen of those rigs were oil-focused, with the remaining two targeting natural gas.

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