By: Reuters – Oil output in the Permian Basin is set to hit another record of 5.499 million barrels per day in December, but production is rising very slowly in the biggest U.S. shale oil basin even though U.S. prices have surged in 2022.
Overall U.S. crude oil output in shale regions is due to rise by a mere 91,000 BPD to 9.191 million BPD in December, the highest since March 2020, the U.S. Energy Information Administration (EIA) said in its monthly productivity report on Monday.
Natural gas production is also expected to reach a record. Shale executives have been more bullish on gas output than crude because of the growing global need for U.S. gas and oil producers’ desire to maintain capital discipline.
In addition, aging shale regions are showing weaker per-well output. Productivity in the biggest oil and gas basins has declined every month since hitting records of new oil well production per rig of 1,545 BPD in December 2020 in the Permian and new gas well production per rig of 33.3 million cubic feet per day (mmcfd) in March 2021 in Appalachia.
The EIA expects new oil well production per rig will drop to 1,049 BPD in the Permian and new gas well production per rig will drop to 26.1 mmcfd in Appalachia, both of which are the lowest since July 2020.
In the Bakken in North Dakota and Montana, the EIA forecast oil output will rise 19,000 BPD to 1.201 million BPD in December, the most since November 2020.
In the Eagle Ford in South Texas, output will rise 14,000 BPD to 1.237 million BPD in December, its highest since April 2020.
Total natural gas output in the big shale basins will increase by 0.6 billion cubic feet per day (bcfd) to a record 95.7 bcfd in December, the EIA forecast.
In the biggest shale gas basin, Appalachia in Pennsylvania, Ohio, and West Virginia, the output will rise to 35.6 bcfd in December, the highest since hitting a record 36.0 bcfd in December 2021.
Gas output in the Permian and the Haynesville in Texas, Louisiana, and Arkansas will rise to record highs of 21.3 bcfd and 16.3 bcfd in December, respectively.
EIA said producers drilled 984 wells in October, the most since March 2020. Total drilled-but-uncompleted (DUC) wells rose by eight to 4,408 in October, the first monthly increase since June 2020.