EIA Drilling Productivity Report Update – Jul ’20
According to the EIA’s July Drilling Productivity Report, U.S. oil output is expected to decline to a 25 month low level throughout the month of August. 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. Jul ’20 production levels were revised 87,000 barrels per day (bpd), or 1.1%, below levels previously forecasted, finishing 55,000 bpd, or 0.7%, below Jun ’20 production levels. Aug ’20 production levels are expected to decline an additional 56,000 bpd, or 0.7%, from the Jul ’20 revised production levels to 7.49 million bpd, finishing at a 25 month low level. The Aug ’20 projected month-over-month decline in oil production would be the sixth experienced in a row, however declines have slowed from levels experienced throughout the months of April and May. Oil production is expected to decline most significantly from the previous month within the Eagle Ford region (-23,000 bpd), followed by the Anadarko (-18,000 bpd) and Niobrara (-18,000 bpd) regions. The declines experienced throughout the aforementioned regions more than offset an overall increase in oil production experienced throughout the other production regions. Production within the Bakken region (+18,000 bpd) increased most significantly from the previous month. Aug ’20 oil production is expected to decline on a YOY basis for the fourth consecutive month, finishing 14.6% below previous year levels. The YOY decline in production would be the largest on record on a percentage basis. EIA drilling productivity figures have been published since 2007. Jun ’20 U.S. drilled-but-uncompleted (DUC) wells are expected to rebound 0.5% from the 18 month low level experienced throughout the previous month. DUC wells, which have been drilled by producers but have not yet been made ready for production, have been compiled since Dec ’13. Permian DUC wells increased most significantly from the previous month throughout Jun ’20, rebounding to a ten month high level. The increase in Permian DUC wells more than offset an overall decline in DUC wells experienced throughout the other production regions.