EIA Drilling Productivity Report Update – Aug ’18
According to the EIA’s August Drilling Productivity Report, U.S. oil output is expected to continue to increase through future months. The Drilling Productivity Report uses recent data on the total number of drilling rigs in operation, estimates of drilling productivity, and estimated changes in production from existing wells to provide estimated changes in oil production for the seven key regions shown below.
Aug ’18 production levels were revised 0.6% below levels previously forecasted but remained 107,000 barrels per day (bpd), or 1.5%, above Jul ’18 production levels. Sep ’18 production levels are expected to increase an additional 93,000 bpd, or 1.2%, from the Aug ’18 revised production levels to 7.52 million bpd, finishing at the highest figure on record. Sep ’18 production forecasts are expected to finish higher on a YOY basis for the 18th consecutive month, up 25.2% from the previous year levels.
The Sep ’18 projected MOM increase in oil production would be the 20th experienced in the past 21 months but the smallest experienced throughout the past eight months on an absolute basis.
Oil production is expected to remain strong within the Permian region (+1.0% MOM), while production is also expected to increase significantly MOM within the Eagle Ford (+1.7%) and Bakken (+1.3%) regions. The aforementioned regions accounted for over 80% of the total expected YOY gains in production during Sep ’18.
U.S. drilled-but-uncompleted (DUC) wells continue to set new highs since the figures began being compiled in Dec ’13. DUC wells have been drilled by producers, but have not yet been made ready for production. The Jul ’18 DUC wells figure of 8,033 finished 2.1% above the previous month, driven higher by a sharp increase in Permian DUC wells.
DUC wells, particularly in the Permian and Eagle Ford regions, will likely contribute to additional oil production heading into the second half of 2018.