US shale oil volumes to spike by another 109,000 b/d in March: EIA-FORECAST

US shale oil volumes to spike by another 109,000 b/d in March: EIA-FORECAST
# 15 February 2022 09:55 (UTC +04:00)

US crude oil production from shale is expected to spike by another 109,000 b/d in March and exceed 8.7 million b/d, driven by growth in the Permian Basin and Texas' Eagle Ford Shale, the US Energy Information Administration said Feb. 14, APA-Economics reports citing SP Global.

The growth is occurring amid increasing drilling activity and spending hikes as front-month NYMEX WTI hits $95/b, and threatens to surge above the $100/b threshold for the first time since 2014 as the world watches to see whether Russia invades neighboring Ukraine.

In the US, the number of drilled but uncompleted wells, called DUCs, continues to rapidly deplete. Another 191 DUCs were completed from December to January, bringing the total US shale tally down to 4,466 DUCs in the EIA's regions documented by its monthly Drilling Productivity Report. That compares to 7,449 DUCs in January 2021.

As for shale production volumes, the EIA revised upward its February shale estimate from 8.54 million b/d up to 8.598 million b/d. The March projection is for 8.707 million b/d.

Most of that growth will yet again come from the booming Permian Basin, which is expected to climb from 5.134 million b/d in February to a new record of 5.205 million b/d in March, the EIA said. Likewise, the Eagle Ford will jump from 1.122 million b/d in February to 1.146 million b/d in March. The other oily basins are all relatively flat by comparison.

About 45% of the 901 new wells completed in DPR regions came from the Permian region, said EIA DPR analyst Jozef Lieskovsky. In that vein, the Permian accounted for about 54% of all the active drilling rig fleets in EIA's regions, he added.

In addition to oil production increases, total US natural gas output from shale resources is projected to increase to 91.7 Bcf/d in March, up 499 Mmcf/d from February. Of this, 124 Mmcf/d will come from the Permian, bringing the Permian up to 20.4 Bcf/d.

The two biggest gas-focused regions, Appalachia and Haynesville, also are expected to see big hikes in March. Appalachia would grow by 114 Mmcf/d to 35.8 Bcf/d, and the Haynesville Shale would rise by 174 Mmcf/d to 14.5 Bcf/d.

As the EIA noted, all the signs are for more and more drilling activity and production with crude prices, rig counts and global oil demand all on the rise. Likewise, DUCs and COVID-19 case counts are both on the decline.

As for the other domestic basins, only modest growth is anticipated in March, the EIA said. The Anadarko Basin and Bakken Shale are only expected to add 6,000 b/d each in March, while the Niobrara region only will tack on another 1,000 b/d.

On the gassy side, the Eagle Ford will add another 78 Mmcf/d, the Bakken would gain 10 Mmcf/d, and the Niobrara just 4 Mmcf/d. The Anadarko would actually lose 5 Mmcf/d in gas production in March.