U.S. oil production from seven major shale formations is forecast to grow by 49,000 barrels per day in September, according to drilling productivity report of Aug. 16 from U.S. Energy Information Administration. That growth is led by Permian Basin, which is expected to increase by 49,000 b/d from 4.756 million b/d in August to 4.805 million b/d in September to offset declines in other regions. EIA said oil output in these seven regions will be 8.086 million b/d in September after 8.037 million b/d in August. Appalachia and Niobrara are the only other regions forecast by EIA to increase oil production.
Led by Permian, Haynesville and Appalachia, production of natural gas also is forecast to increase in September in seven regions. Production in September is expected to be 86.084 billion cubic feet per day – up by 158 million cfd from 85.926 billion cfd in August. Permian will be up by 72 million cfd to 18.019 billion cfd, Haynesville will be up by 124 million cfd to 13.537 billion cfd, and Appalachia will be up 20 million cfd to 34.386 billion cfd.
EIA also said the count of DUC wells (drilled but uncompleted) continues to decline in these seven regions. The count in Permian Basin fell by 130 DUC wells from 2,419 in June to 2,289 in July. EIA said there were 5,957 DUC wells in July in seven regions after 6,215 in June.
Research firm Rystad Energy said earlier this month there were 2,381 “live” DUC wells in June in major regions – the lowest since 2013. The Rystad report does not include “dead” DUC wells that were drilled more than 24 months earlier and left uncompleted. About 95 percent of wells drilled typically are completed within two years, according to Oil & Gas Journal, and the probability of those more than two years old now being completed are low. Artem Abramov of Rystad said, “Any further increases in fracking, and subsequently well completions, will now require producers to first expand drilling by adding more rigs.” Rystad said about 1,550 “live” horizontal DUC wells remained in Permian Basin in June – decline of 37 percent from 2,470 a year earlier. Rystad added that the industry “is not that far from a complete normalization of the DUC inventory level.”