© Reuters. FILE PHOTO: An oil pump is seen operating in the Permian Basin near Midland
By Devika Krishna Kumar and Scott DiSavino
NEW YORK (Reuters) – oil output from seven major shale formations is expected to rise by about 80,000 barrels per day (bpd) in May to a record 8.46 million bpd, the U.S. Energy Information Administration said in its monthly drilling productivity report on Monday.
The largest change is forecast in the Permian Basin of Texas and New Mexico, where output is expected to climb by 42,000 bpd to a fresh peak of about 4.14 million bpd in May.
In North Dakota's Bakken region, shale production is estimated to rise by about 11,000 bpd to about 1.39 million bpd, easing from a record 1.41 million bpd hit in January. In the Eagle Ford region, output is expected to edge higher by 7,000 bpd to about 1.43 million bpd, which would be the highest monthly output since January 2016.
Production growth in the Permian and other key shale basins have slowed as oil prices fell in the fourth quarter and many shale companies cut spending in the face of investor pressure to focus on earnings growth instead of increased output.
Prices have rebounded this year, but drillers are expected to remain cautious. Some shale producers are turning to workforce cuts as investors step up demands for returns.
However, major oil companies are boosting their presence, particularly in the Permian, the largest U.S. shale oil field.
The U.S. rig count, an early indicator of future output, remains higher than a year ago.
The EIA said producers drilled 1,388 wells and completed 1,392, the most since January 2015, in the biggest shale basins in March, leaving total drilled but uncompleted (DUC) wells down 4 at 8,500, according to data going back to December 2013.
That was the first decline in DUCs since March 2018. The DUCs hit a record high 8,504 in February.
Separately, U.S. output was projected to increase to a record 79.8 billion cubic feet per day in May, the EIA. That would be up 0.9 bcfd over the April forecast and mark the 16th consecutive monthly increase.
A year ago in May, output was 67.4 bcfd.
The EIA projected gas output would increase in all the big shale basins in May, except Anadarko in Oklahoma and Texas.
Output in the Appalachia region in Pennsylvania, Ohio and West Virginia, the nation's biggest shale gas play, was set to rise almost 0.4 bcfd to a record 32.2 bcfd in May. Appalachia production was 27.1 bcfd Read More – Source