DENVER, Sept. 18 (UPI) — Even if rig numbers across U.S. shale oil basins hold steady, current economics means production could start to decline, a forecasting unit of Platts reported.
Low crude oil prices, down about 50 percent year-on-year, means energy companies have less capital to invest in exploration and production.
In Texas, the No. 1 oil producer in the nation, the state energy regulator said the 864 drilling permits awarded in August was 64 percent lower year-on-year. The rig count in North Dakota, the No. 2 oil producer, of 67 is 66 percent lower than this date in 2014.
Sami Yahya, an analyst with Bentek, the forecasting unit for Platts, said energy companies are figuring out ways to save money by either drilling en masse are through deferments.
“While the U.S. is able to drill more wells now with fewer rigs, some producers are opting to defer completing their wells until better economic conditions are present,” he said in an emailed report. “In other words, production could begin to decline even if rig activity and number of drilled wells remain steady. This is a crucial risk to current production numbers.”
In the Eagle Ford shale basin in Texas, one of the state’s most lucrative fields, Bentek finds oil production increasing by about 1 percent on average each month. North Dakota reported a recent decline in oil production, though the 6,000 barrel per day drop from July to August is less than 1 percent of overall output.
In its latest short-term market report, however, the U.S. Energy Information Administration said total crude oil production will decline 4.3 percent from expected full-year 2015 levels to 8.8 million barrels per day by 2016.
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