Natural gas production from the Permian Basin climbed in September by 0.2 Bcf/d to 8.8 Bcf/d, eclipsing gas output from the Haynesville and Eagle Ford shales, the Federal Reserve Board of Dallas said Thursday.
In its monthly Energy Indicators report, analysts said production in the Permian has been growing since early 2013 and now exceeds output from the Haynesville, which stands at 6.9 Bcf/d, and the Eagle Ford, currently 6.1 Bcf/d.
“Despite largely being considered a byproduct by producers in the region, natural gas production in the Permian continues to grow due to the sheer number of oil wells being completed,” analysts said.
Permian oil output increased in September by 58,600 b/d to 2.56 million, while Eagle Ford production was down by 1,100 b/d to 1.21 million, the report noted.
“Eagle Ford production data were recently revised down and now show production to be flat since the start of the year,” analysts said. Hurricane Harvey reduced output in South Texas for a short period when operators shut in wells and third-party issues pressured operations.
At the end of September, analysts estimated operating rigs numbered 385 in the Permian and 68 in the Eagle Ford. The Haynesville rig count was not included in the report.
Meanwhile, crude oil inventories in Cushing, OK increased in September by 5.2 million bbl to 62.5 million, a 9.1% jump, while U.S. commercial crude oil inventories excluding Cushing rose by only 2.0 million bbl to 402.5 million, a 0.5% increase.
“Rising production in the U.S., coupled with temporary refinery outages from Hurricane Harvey, have pushed more production into storage in Cushing, deepening the discount between West Texas Intermediate and Brent,” according to analysts.