There was a 4% increase in overall new US production capacity (NPC*) to 805 Mboe/d, according to the August Drillinginfo Index. Last month’s index showed US production capacity of 751 Mboe/d. The August Index is reflective of the wells drilled in July, and, as noted by Drillinginfo, is usually a 5-6 month forward indicator of what production might be. Percentages are also normalized for length of months.
New US oil production capacity increased by 9% from June, to 398 Mbbl/d, while US gas production capacity decreased by 1% from June, to 2.44 bcf/d.
According to the index, while rig count and permits have declined, production capacity has continued to increase, "indicating that higher grade locations and better practices are yielding substantively better wells month over month per rig/month."
The Permian continues to be the largest play in North America. Despite the decline, the index showed active working rigs in the Permian Basin increased between July 1 and July 31 to 254 from 236. Production capacity in the Permian Basin also increased, up 25% from May through July, despite the drop in oil prices from $62 to $42 per barrel.
The top three counties in terms of new oil production in July 2015 were McKenzie, ND (30 Mbbl/d), Karnes, TX (29 Mbbl/d), and DeWitt, TX (29 Mbbl/d).
The top three counties in terms of new gas production in July 2015 were Lincoln, LA (253 MMcf/d), Susquehanna, PA (191 MMcf/d), and Sublette, WY (132 MMcf/d).
*The NPC number is based on the number of wells at each rig (not just the number of rigs, since they can have multiple wells at each rig) and the productivity of each well to more accurately estimate the combined peak production rate of the new wells.