On St. Patrick’s Day the U.S. Energy Information Administration (EIA) reported that oil production from three of America’s largest shale plays is in decline. The EIA is forecasting that total U.S. oil production will be in decline in the 3rd quarter. The South Texas Eagle Ford, North Dakota’s Bakken/Three Forks and the Niobrara in Colorado & Wyoming are in decline. Since horizontal shale wells have very steep production decline rates (more than 50% in the first year), the oil supply “glut” will be corrected by market forces. Shale plays require continuous drilling or they quickly go on decline. Note: In the EIA chart above, the government’s production forecast is based on an active onshore rig count of 1,300. Baker Hughes reported March 13, 2015 that the land rig count was down to 1,069. I am forecasting the active onshore rig count in the U.S. to fall below 800 by […]