EIA: US shale production set to record first drop in four years

The US Energy Information Administration’s (EIA’s) monthly drilling report that was released on Monday, April 13, says that oil production from US shale plays is expected to decline 45,000 barrels per day (bpd) to 4.98 million bpd in May from 5.02 million bpd in April – marking this as the first such monthly decline seen in over four years.

The EIA’s drilling productivity report says that, while the Permian production is forecast to rise 11,000 bpd to 1.99 million bpd, this is the smallest monthly increase since November 2013. Bakken production is expected to fall 23,000 bpd to 1.29 million bpd; Eagle Ford production expected to decline 33,000 bpd to 1.69 million bpd (the largest monthly drop since EIA began tracking the data in 2007), and Niobrara production is set to lose 14,000 bpd, resulting in its monthly production level falling to 403,000 bpd. Utica shale production is expected to increase just 2,000 bpd.

In addition to US production suffering from industry cutbacks due to the oil price drop-off, shale drillers are finding that older shale wells are experiencing a natural decline in output (an output that is set to slip in April by 57,000 bpd) and that newly drilled wells are outpacing these older wells. The EIA report states that new-well production per rig in the Eagle Ford shale play rose at the record-breaking pace of 22 bpd to 680 bpd in April, and from 20 bpd to 700 bpd in May. In the Permian Basin, new-well production per rig also rose extremely fast (from 36 bpd to 240 bpd in April, and from 25 bpd to 265 bpd in May).

The EIA sees a decline in natural gas production in US shale plays, as production falls 23 million cubic feet per day (MMcfd) to 45.97 billion cubic feet per day in May from April – the first such decline that the EIA has recorded since July 2013. In May, natural gas production in the Niobrara shale play is expected to be down 50 MMcfd. It is also expected to be down 45 MMcfd in the Eagle Ford shale play, and down 21 MMcfd in the Bakken shale play.

Growth in May, however, is expected in the Haynesville (up 44 MMcfd), Utica (up 35 MMcfd), and Marcellus (up 10 MMcfd) shale plays.

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