EIA Drilling Productivity Report Update – Jun ’18
According to the EIA’s June 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.
Jun ’18 production levels were revised 0.3% above levels previously forecasted, finishing 128,000 barrels per day (bpd), or 1.9%, above May ’18 production levels. Jul ’18 production levels are expected to increase an additional 141,000 bpd, or 2.0%, from the Jun ’18 revised production levels to 7.34 million bpd, finishing at the highest figure on record. Jul ’18 production forecasts are expected to finish higher on a YOY basis for the 16th consecutive month, up 28.8% from the previous year levels.
The Jul ’18 projected MOM increase in oil production would be the 18th experienced in the past 19 months and the largest experienced throughout the past three months on an absolute basis.
Oil production is expected to remain strong within the Permian region (+2.2% MOM), while production is also expected to increase significantly MOM within the Eagle Ford (+2.3%), Bakken (+1.5%) and Anadarko (+1.8%) regions. The aforementioned regions accounted for over 90% of the total expected YOY gains in production during Jul ’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 May ’18 DUC wells figure of 7,772 finished 0.4% above the previous month, driven higher by a sharp increase in Permian DUC wells. The May ’18 MOM increase in DUC wells was the smallest experienced throughout the past 18 months, however.
DUC wells, particularly in the Permian and Eagle Ford regions, will likely contribute to additional oil production heading into the second quarter of 2018.