Current operations 3.15 times more productive than those of January 2014

EnerCom has released the latest Effective Rig Count, examining the state of drilling activity in major shale basins.

The EERC rose in April, reaching 2,826 rigs. This indicates it would take 2,826 rigs from January 2014 to match the current activity level, due to the significant improvements in techniques and technologies over the past four years. Modern rigs are yielding 3.15 times more production than those of January 2014, meaning it only takes 898 rigs in the major shale basins to produce the current growth rates.

EERC Rises to 2,826 - But Permian Efficiency Gains Tap the Brakes

Source: EnerCom Analytics

Productivity growth worth watching

Productivity levels are approaching the peak seen in mid-2016, when companies were laser-focused on efficiency, and completions outpaced drilling. Today, companies have begun to look for growth and completions are lagging behind drilling activities, holding productivity down.

Despite this, though, modern operations are only slightly less efficient than those of August 2016, when rigs yielded 3.35 times more production than those of January 2014.

Permian, Haynesville efficiency growth taps brakes

However, productivity growth has stagnated over the past few months, a shift driven entirely by the Permian.

While the EERC rose in the Permian this month, the change was almost entirely due to increasing rig activity in the basin, as ten additional rigs became active. Efficiency growth in the basin has been minimal in the past three months, and is below almost every other basin. This situation may continue, as midstream takeaway problems interfere with growth in the basin.

EERC Rises to 2,826 - But Permian Efficiency Gains Tap the Brakes

Source: EnerCom Analytics

Despite this, however, the Permian added the most effective rigs this month, and now has an Effective Rig Count of 1,430. This accounts for more than half of all effective rigs in the major shale basins, and is the highest EERC reported by the play so far. The Anadarko and Eagle Ford also saw significant increases in EERC, due to a combination of increased efficiency and reported rig count.

EERC Rises to 2,826 - But Permian Efficiency Gains Tap the Brakes

Source: EnerCom Analytics

EIA predicts a ‘first’: major basins will produce more than 7 million barrels per day in May

Eagle Ford, Bakken ramp up oil output

The EIA continues to predict rapid growth in oil and gas production from the major shale basins, with strong increases in the next month.

The agency estimates major shale basins will produce a combined 7.03 MMBOPD in May, the first time unconventional production exceeded 7 MMBOPD. Further growth is expected from May to June, with oil output rising by 144 MBOPD. Unlike previous months, this growth will not be entirely driven by the Permian, as more basins are ramping up. While the Permian is expected to add 78 MBOPD, the Eagle Ford is predicted to grow by 33 MBOPD, and forecasts show the Bakken adding 20 MBOPD.

Significant growth is also expected in gas output, with total production rising by 1.1 Bcf/d. As usual, the Appalachian basin will provide most of this growth, adding 373 MMcf/d from May to June. The Permian, Haynesville and Eagle Ford are expected to provide most of the rest, as each is expected to grow output significantly.

EERC Rises to 2,826 - But Permian Efficiency Gains Tap the Brakes

Source: EnerCom Analytics

Niobrara DUC count dropping fast as completions outpace drilling

The number of drilled uncompleted wells in the U.S. continues to rise, as the EIA estimates the DUC count increased by a net 55 from March to April. Despite the overall increase, only two basins saw drilling outpace completions, the Permian and Eagle Ford. All other major basins saw decreases in DUC count, with counts falling by 74. The Niobrara saw the largest drop in DUC wells, as companies completed 44 more wells than they drilled in the basin last month. This is the largest drop in DUC count seen in the basin since at least early 2014, and the largest seen in any basin in 18 months.

While it is unlikely that completions will continue to outpace drilling at such an aggressive rate, at this pace it would only take 11 months to deplete the Niobrara’s entire DUC inventory.

EERC Rises to 2,826 - But Permian Efficiency Gains Tap the Brakes

Source: EIA


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