Category: Shale Oil

NEW YORK, April 13 (Reuters) – Oil production from the fastest-growing U.S. shale plays is set to fall some 45,000 barrels per day to 4.98 million bpd in May from April, the first monthly decline in over four years, projections from the U.S. Energy Information Administration showed on Monday. The projected slip from 5.02 million bpd in April underscores how record crude production from the U.S. shale boom may be backtracking after global markets saw prices effectively slashed by 60 percent since June on oversupply and lackluster demand. Oil production from the Permian Basin of West Texas and New Mexico were forecast to rise 11,000 bpd to 1.99 million bpd, the smallest monthly increase since November 2013, according to the EIA’s drilling productivity report. Production from the Bakken formation of North Dakota will fall 23,000 bpd to 1.3 million bpd. Eagle Ford oil production in South Texas will fall […]

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US shale oil production is expected see its first net drop in May of 57,000 b/d, reversing a years-long trend of continued growth, according to the US Energy Information Administration’s latest Drilling Productivity Report, which was published Monday. The data show estimated net production in the Bakken, Eagle Ford and Niobrara shale plays all dropping in May, as they did in April. But April’s estimates still showed a net growth of 1,000 b/d, EIA said. May’s estimates are the first time total net domestic shale oil output will have contracted since the EIA began publishing the DPR in November 2013. Among shale plays, only the Permian Basin in West Texas and New Mexico is forecast to show a significant projected net gain in May — of 11,000 b/d. That compares with 21,000 b/d net gain projected for the Permian in April. Because of low oil prices that have clung […]

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The EIA just released its  Drilling Productivity Report  for April. In this report they have post what they expect the shale production data will look like through May 2015. DPR Total Shale The EIA is expecting a rounded top for shale production. They are expecting a big drop of total shale production in May to the tune of 56,673 barrels per day. In April they had total shale production down 2,098 bpd. The EIA has Bakken, Eagle Ford and Niobrara down but still has the Permian up by 10,647 bpd. DPR Change from Previous Month The EIA has total shale up over 100,000 bpd November thru February, dropping to up just66,000 bpd in March and not going negative until April and May. But that is not the way it will eventually turn out. DPR Total Shale Here I have the North Dakota Industrial Commission data for North Dakota through January and […]

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Number of rigs in service in North Dakota down by half from historic peak. File Photo by Calin Tatu/Shutterstock. BISMARCK, N.D., April 13 (UPI) — The number of rigs actively exploring for or producing oil and gas in North Dakota, is down more than half from its historic peak, state data show Monday. State data show 93 rigs in active service in North Dakota, a state at the heart of the shale boom in the United States. That’s one of the lowest rig counts in years, marking a 50 percent decline year-on-year and a 55 percent from the historic peak reached in 2012. The low price of oil, down about half from its June 2014 peak for the U.S. benchmark, has forced energy companies to spend less on exploration and production. Oil services company Baker Hughes last week reported 988 active rigs in the United States for the week […]

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Shale Gas and Fracking: The science behind the controversy by Michael Stephenson, Elsevier, 2015. Michael Stephenson is Director of Science and Technology at the British Geological Survey. Anyone looking for a comprehensive review of the controversies associated with fracking is going to be disappointed by this short book. After having ploughed almost all of its 170 pages I found, near the back, the following sentence: “I won’t go through all of the contested issues, because the chapters in the book provide a basis to carve out your own analysis looking at some of the main peer reviewed papers”. So the message is that if you want to make up your mind about shale then go to the peer reviewed literature. The implied message in this, made explicit at times, is that many opponents of the shale gas industry don’t do this and many members of the public rely too […]

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U.S. shale oil operations. For U.S. shale drillers, the crash in oil prices came with a $26 billion safety net. That’s how much they stand to get paid on insurance they bought to protect themselves against a bear market — as long as prices stay low. The flipside is that those who sold the price hedges now have to make good. At the top of the list are the same Wall Street banks that financed the biggest energy boom in U.S. history, including JPMorgan Chase & Co., Bank of America Corp., Citigroup Inc. and Wells Fargo & Co. While it’s standard practice for them to sell some of that risk to third parties, it’s nearly impossible to identify who exactly is on the hook because there are no rules requiring disclosure of all transactions. The buyers come from groups like hedge funds, airlines, refiners and utilities. “The folks who […]

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In North Dakota’s Bakken shale oil play, the drilling boom has gone bust. It may only be a temporary bust—but aren’t all booms, and all busts? Here I show a compilation of the latest data from North Dakota, assembled in advance of the state’s monthly release. Production was down 1.5 percent from January to February, that’s in addition to a 3.1 percent decline the month before. North Dakota’s oil production fell 3.1 percent from December to January, and another 1.5 percent from January to February, according to statistics I compiled from the state, ahead of their monthly “Director’s Cut” report. Bakken is mostly in North Dakota—and North Dakota’s oil production is overwhelmingly from the Bakken. So Bakken and North Dakota are, for most intents and purposes, the same thing. So this means Bakken oil production has declined for two months in a row, and was running at a rate […]

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Halliburton Co., which is seeking regulatory approval for its roughly $35 billion purchase of Baker Hughes Inc., plans to sell three drilling business. The three businesses are drill bits, directional drilling and its LWD/MWD businesses, which are logging while drilling and measurement while drilling. The divisions will be marketed separately, the oilfield-service company said Tuesday. “Although we would prefer to retain these assets, we will be required to divest some of our overlapping businesses to obtain competition authorities’ approvals as anticipated when we announced the Halliburton-Baker Hughes transaction,” Halliburton said. Halliburton expects to complete the sale of the businesses in the same time frame as the closing of the Baker Hughes deal late in the second half of 2015. In February, the companies said they received an expected second request for additional information from antitrust regulators. Halliburton and others in the industry have cut jobs following a sharp decline […]

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The EIA has released their latest Short-Term Energy Outlook . Below I compare the EIA’s ever changing outlook for future oil production. The STEO charts below are total liquids and are in million barrels per day. STEO April The EIA increased their December 2014 all liquids estimate but dramatically decreased their January 2015 estimate. The EIA now says US total liquids production declined by 480,000 barrels per day in January.  STEO April NO The EIA still believes non-OPEC total liquids production will take off but not until 2016. They have non-OPEC liquids reaching a new high in December but dropping almost one million barrels per day in January and not reaching that December high again until July of 2016. STEO April NO Less US The EIA’s optimism depends entirely on US production increase returning to the levels it reached in the last three years. Without any US increase they […]

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North Dakota’s oil production fell 3.1 percent from December to January, and another 1.5 percent from January to February, according to statistics I compiled from the state, ahead of their monthly “Director’s Cut” report. Bakken is mostly in North Dakota—and North Dakota’s oil production is overwhelmingly from the Bakken. So Bakken and North Dakota are, for most intents and purposes, the same thing. So this means Bakken oil production has declined for two months in a row, and was running at a rate of 1.17 million barrels per day in February. (Remember, folks, you heard it here first.)  The graph above shows my compilation of the North Dakota data—and for comparison, a year-and-a-half of the state’s own figures. For whatever reason, mine is consistently coming out a tad lower—about 0.6 percent lower, to be exact. Perhaps there are some small number of older wells that I’m missing. In any […]

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