But Anadarko Basin faces declining production as drilling slows

By Richard Rostad, analyst, Oil & Gas 360

Oil & Gas 360 has released its latest Effective Rig Count, evaluating the state of drilling activity and reported production from the major shale basins.

The Effective Rig Count continued to slide in February, dropping by 33 to 2,782. This indicates that it would require 2,782 rigs from January 2014 to match current activity levels in the major shale basins. This is the third ERC decline in a row, as rig activity declines in the wake of the Q4 2018 price decline and major basins wrestle with constraints.

Improvements in technologies and techniques have significantly increased efficiencies since the downturn began. These enhancements mean the average rig in the major shale basins are yielding 2.9 times more production than the average rig from January 2014.

March 2018 Effective Rig Count – Oil & Gas 360

 

Anadarko ERC dropped 22% over past four months

The Appalachian saw the largest increase in Effective Rig Count in February, adding 38 effective rigs. As was noted last month, efficiencies in Appalachia plummeted in December and January, for reasons that are not clear. This may be the result of operational difficulties and disappointing preliminary results, but the impediments have at least partly been resolved, as per-rig efficiencies increased significantly in February.

The Permian and Anadarko basins, on the other hand, saw Effective Rig Counts fall by a combined 101 in February as drilling activity declined. The Anadarko has seen the largest relative drop in ERC since November, with the measure declining by 22% over the past four months. 

Overall output up 232 MBOEPD, despite Anadarko decline; Permian and Appalachia lead the U.S. in production growth

March 2018 Oil & Gas Production Data – Oil & Gas 360

The Anadarko’s declining activity has led the EIA to forecast declining production from the basin in April. Current projections indicate the Anadarko will see oil and gas production drop by 5 MBOPD and 1 MMcf/d next month, making it the only basin to report a drop in output in April.

As usual, the Permian and Appalachian show the largest growth among shale basins, adding a combined 140 MBOEPD in the month. The Niobrara is expected to grow at an unusually rapid pace, adding 34 MBOEPD in April. Overall, the EIA forecasts the major shale basins will grow by 85 MBOPD and 883 MMcf/d.

 


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