EIA: Production from major US oil, gas regions to rise in January

Crude oil and natural gas output from the seven major onshore producing regions in the US is expected to begin 2017 with a modest increase, according to data from the US Energy Information Administration.

The estimates are part of the agency’s latest Drilling Productivity Report, which tracks “the total number of drilling rigs in operation, along with estimates of drilling productivity and estimated changes in production from existing oil and natural gas wells” in the Bakken, Eagle Ford, Haynesville, Marcellus, Niobrara, Permian, and Utica.

Combined oil production from the regions during January is expected to rise 2,000 b/d to 4.542 million b/d. The Permian is seen jumping 37,000 b/d to 2.126 million b/d, offsetting a 23,000-b/d drop in the neighboring Eagle Ford to 980,000 b/d, and a 13,000-b/d loss in the Bakken to 905,000 b/d. The Niobrara also is expected to contribute barrels, with a forecast 3,000-b/d increase to 406,000 b/d.

Natural gas production from the seven regions during January is forecast to gain 88 MMcfd to 47.508 bcfd. EIA projects the Marcellus to lead the way with a 160-MMcfd jump to 18.464 bcfd, followed by the Permian with a 68-MMcfd increase to 7.48 bcfd, and the Haynesville with a 27-MMcfd rise to 6.015 bcfd. Eagle Ford gas output, meanwhile, is expected to plunge 163 MMcfd to 5.449 bcfd.

EIA notes the seven regions covered by the DPR accounted for 92% of US oil production growth and all US gas production growth during 2011-14.

Permian drilling expansion

A common theme in industry data in recent months—whether it relates to drilling and production, or mergers and acquisitions—has been the dominance of overall US oil and gas activity by the Permian, where lower breakeven prices and positive well results offer producers a chance to churn their way out of the industry doldrums.

The basin on its own has staved off major US oil production declines, boosted weekly US rig counts, and driven increased tallies of drilled but uncompleted (DUC) wells. EIA says the Permian’s DUC count in November rose for the fifth consecutive month as drillers added 99 DUC wells, bringing the basin’s total to 1,568.

The expanded DUC well tally follows a rig-count spike in the basin of about 100 units from the end of May through the end of November, according to Baker Hughes Inc. data. During the week ended Dec. 9, the basin added another 11 rigs to bring its count to 246 (OGJ Online, Dec. 9, 2016).

EIA estimates the seven regions during the month gained 64 DUC wells to 5,219. Modest contributors to the gain included the Niobrara, up 3 DUC wells to 675; and the Bakken, up 1 to 814.

Consistent with its downward trend in the other DPR categories, the Eagle Ford led the regions in November with a 19-DUC well decline to 1,278. The Marcellus lost 13 to 623, the Utica dropped 6 to 109, and Haynesville edged down 1 to 152.

Contact Matt Zborowski at matthewz@ogjonline.com.

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