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Natural Gas Production From Key U.S. Plays to Surpass 73 Bcf/d in October, Says EIA

Production from the seven most prolific U.S. onshore unconventional plays -- the Anadarko, Appalachian and Permian basins, and the Bakken, Eagle Ford, Haynesville and Niobrara formations -- in October will continue an upward swing that began 22 months ago, with natural gas output forecast to reach 73.01 Bcf/d and oil an estimated 7.59 million b/d, according to the U.S. Energy Information Administration (EIA).

Both numbers are higher compared to estimated September production. In its latest Drilling Productivity Report (DPR), which was released Monday, EIA said it expects total gas production from the the seven key regions this month to be 72.13 Bcf/d, and oil production to be 7.52 million b/d.

Steady increases out of the plays began in January 2017, when total gas production out of the seven regions was estimated at 47.51 Bcf/d, and total oil production was an estimated 4.54 million b/d.

Once again all seven plays are expected to see increased natural gas production in October compared to the previous month, with the Appalachian Basin, home to the mighty Marcellus and Utica shales, continuing to lead the way with an estimated 29.44 Bcf/d, up from 29.14 Bcf/d in September, EIA said.

Increases are also expected in the Anadarko (7.32 Bcf/d from 7.22 Bcf/d), Bakken (2.52 Bcf/d from 2.50 Bcf/d), Eagle Ford (7.13 Bcf/d from 7.01 Bcf/d), Haynesville (9.70 Bcf/d from 9.56 Bcf/d), Niobrara (5.18 Bcf/d from 5.13 Bcf/d) and Permian (11.80 Bcf/d from 11.57 Bcf/d).

Production increases are expected to be almost universal on the oil side of the ledger as well, according to the DPR.

Nearly a third of the total oil production increase will come from the Permian, which is forecast to reach 3.46 million b/d, compared to 3.43 million b/d in September.

Oil output increases are expected in five other plays, with the Anadarko estimated at 562,000 b/d, Appalachia at 130,000 b/d, Bakken at 1.33 million b/d, Eagle Ford at 1.45 million b/d and Niobrara at 620,000 b/d. The Haynesville (43,000 b/d) is forecast to see oil production remain unchanged month/month.

Drilled but uncompleted (DUC) well counts across the Big Seven ended August at 8,269, an increase of 238 from July, EIA said.

The bulk of the DUCs, and the largest increase in DUCs, came in the Permian, which jumped 211 in August to 3,630, and in the Eagle Ford, which increased 28 to 1,545. Three Big Seven plays saw their DUC numbers decrease from July: Appalachia (minus 19), the Bakken (minus 4) and the Niobrara (minus 20).

The productivity of new oil wells in the Big Seven plays is expected to decrease slightly in October to 641 b/d, according to the DPR. New-well gas production per rig is also expected to decrease marginally during the month to 3.73 MMcf/d.

EIA compiles the DPR using recent U.S. data on the total number of drilling rigs in operation along with estimates of drilling productivity and estimated changes in output from existing wells to provide estimated changes in production.

The United States netted seven rigs -- all of them oil-directed -- for the week ended Sept. 14, including gains in Louisiana, Colorado and Oklahoma, according to data from Baker Hughes, a GE Company. Among plays, the Denver Julesburg Basin-Niobrara formation and the Marcellus Shale were the biggest movers on the week, picking up two rigs each. The Mississippian Lime and Williston Basin each added one rig, while the Permian Basin saw one net rig pack up shop for the week.

A total of 4,389 permits to drill in the U.S. onshore were filed by operators during August, up 22% from July and nearly one-third higher from a year ago, according to data compiled by Evercore ISI.

 

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