Crude Oil and Lease Condensate Production at Highest Volume Since 1986
Source: U.S. Energy Information Administration, DrillingInfo, Inc., Illinois State Geological Survey, Indiana Geological Survey
Crude oil and lease condensate production
in the United States exceeded 8.6 million barrels per day (bbl/d) in
August, a production volume not observed since July 1986, according to
EIA’s latest Petroleum Supply Monthly.
More than half of total U.S. production
was accounted for by record production from three basins in three
states. Production from the Permian Basin in Texas and New Mexico
accounted for 1.66 million bbl/d, while the Eagle Ford Shale in the
Western Gulf Basin, also located in Texas, produced 1.57 million bbl/d.
The Bakken Shale in North Dakota’s Williston Basin accounted for 1.13
Domestic production has increased
dramatically over the past four years, increasing from 5.4 million bbl/d
in January 2010 to its current level, driven by increasing production
from shale and other tight formations. During 2014 alone, 10 states (the
three states previously mentioned in addition to Oklahoma, Colorado,
Wyoming, Utah, Ohio, West Virginia, and Pennsylvania) have set monthly
production records since 1995, and accounted for more than 64% of total
U.S. production during August.
Source: U.S. Energy Information Administration, Petroleum Supply Monthly
Although down from 2,031 rigs in 2008, U.S. oil and natural gas rig counts have been increasing over the past two years. A total of 1,904 rigs were actively drilling during August,
1,578 of which were targeting liquids. Notably, once production starts,
three-fifths of all the wells produce both oil and natural gas. Of the
1,904 active rigs, 62 rigs were operating offshore while the remaining
1,842 rigs were drilling onshore.
Now typical of the industry, horizontal
rigs represent the most common rig type with 1,330 active drilling
operations in August, while 374 vertical and 210 directional drilling
rigs were operational, respectively. Higher rig counts, along with improvements in drilling productivity, are expected to increase U.S. liquids production to nearly 9.7 million bbl/d by December 2015.
U.S. oil production has been increasing
monthly at an average of 62,000 bbl/d since 2010. EIA forecasts that
previous production highs set in the 1970s will be surpassed before the end of 2015.
This is especially notable as Alaska production provided up to 2
million bbl/d of total U.S. production volumes during high production
years in the 1980s. Decreases in Alaska production are related to
natural reservoir decline and reduced exploration along the North Slope;
however, discoveries in southern portions of Alaska’s Cook Inlet are
adding new production capacity.
Production gains have been observed
across the Lower 48, with particular increases in crude oil and lease
condensate production from shale and tight formations. Production
estimates from EIA’s Drilling Productivity Report
confirm that many top-producing reservoirs include production involving
horizontally drilled wells, hydraulic fracturing reservoir stimulation,
and multi-well pad drilling. The highest-ranked tight producing
reservoirs in 2014 include Texas’s Eagle Ford and Wolfcamp formations,
North Dakota’s Bakken-Three Forks formations, New Mexico’s top Spraberry
and Bone Springs formations, Oklahoma’s Woodford Shale formations,
Colorado’s Niobrara formation, Utah’s Green River formations, Ohio’s
Utica and Point Pleasant formations, and the Marcellus Shale formations
in West Virginia and Pennsylvania.
Principal contributor: Evan Frye