Yemisi Izuora
There are strong indications that US oil output from seven major shale formations is expected to rise by 85,000 barrels per day in April to a record 8.59 million bpd, the U.S. Energy Information Administration said in its monthly drilling productivity report on Monday.
Although April’s total, if accurate, would be a record high, the increase continues a pattern of shrinking gains since September and would be the smallest monthly increase since May 2018, when drillers boosted output by just 25,900 bpd.
The largest monthly change is forecast in the Permian Basin of Texas and New Mexico, where output is expected to climb by 40,000 bpd to a record 4.18 million bpd in April.
In North Dakota’s Bakken region, shale production is estimated to rise by about 17,000 bpd to a record 1.46 million bpd in April. In the Eagle Ford region, output is expected to edge higher by 8,000 bpd to about 1.44 million bpd, which would be the highest monthly output since January 2016.
Production growth in the Permian has slowed as oil prices fell in the fourth quarter and several shale companies cut spending in the face of investor pressure to focus on earnings growth instead of increased output.
The U.S. rig count, an early indicator of future output, has contracted over the past three months, with drilling at its lowest in nearly a year.
Still, the United States is the world’s biggest oil producer, ahead of Saudi Arabia and Russia, the International Energy Agency said last week, and will drive global oil supply growth over the next five years, adding another 4 million bpd to the country’s already booming output.
Separately, U.S. natural gas output was projected to increase to a record 79.0 billion cubic feet per day in April. That would be up almost 0.9 bcfd over the March forecast and mark the 15th consecutive monthly increase.
A year ago in April, output was 66.3 bcfd.
The EIA projected gas output would increase in all the big shale basins in April, except Anadarko in Oklahoma and Texas.
Output in the Appalachia region in Pennsylvania, Ohio and West Virginia, the nation’s biggest shale gas play, was set to rise almost 0.4 bcfd to a record 31.5 bcfd in April. Appalachia production was 27.0 bcfd in April a year ago.
The EIA said producers drilled 1,418 wells and completed 1,325 in the biggest shale basins in February, leaving total drilled but uncompleted wells up 93 at a record high 8,576, according to data going back to December 2013.