O&G – US shale resources and production

by Eduardo Petazze
The US-EIA released on Oct. 22, 2013 its Drilling Productivity Report – pdf, 10 pages The Drilling Producti it! "e#ort uses recent data on the total nu$%er o& drilling rigs in o#eration along 'ith esti$ates o& drilling #roducti it! and esti$ated changes in #roduction &ro$ e(isting oil and natural gas 'ells to #ro ide esti$ated changes in oil and natural gas #roduction &or si( )e! &ields. a!!en "agle #ord $aynesville %arcellus &io'rara Per(ian These si( regions accounted &or nearl! *0+ o& do$estic oil #roduction gro'th and irtuall! all do$estic natural gas #roduction gro'th during 2011-12

Production, depletion trends are !eys to predicting natural gas and oil production
Jozef Lieskovsky, Sam Gorgen The change in production volumes from one month to the next illustrates the positive and negative forces that affect production volumes in a given region. EIA estimates the month-to-month change in production by: • First summing the prior month's production and expected production from ne ells in their first full month of production • Then adding the expected change in the region's production from all other ells. This is the legacy production change! hich is typically negative because ell production naturally declines over time.

"nderstanding the positive and negative forces that affect production volumes in a given region allo s the estimation of the number of rigs re#uired to ma$e up for the natural loss of production from existing ells. This measure of production declines and potential increases helps hen evaluating the number of rigs in a region and their potential effect on production volumes. %onsidering ne and existing ells separately helps to highlight regions here the gro ing number of relatively ne production! putting more pressure on increasing production from ne ells in order to $eep net output rising. ells leads to large monthly declines in legacy

The productivity gains and the current rig count in the Eagle Ford and &ermian regions comfortably offset the current decline rates. The recent emergence of production gro th in the 'iobrara and &ermian! along ith strong continued gro th in the Eagle Ford! is evidence that tight oil production ill continue to drive production gro th in the "nited (tates.

)o ever! in the *a$$en region! here the total rig count has declined from a pea$ level last year! the improvements in rig and ell productivity have barely offset the gro ing declines from currently producing ells. As a result EIA has significantly do ngraded the production gro th in the *a$$en play! and unless there is a significant increase in ell productivity! drilling speed! or a higher rig count! there ill not be a return to production gro th rates experienced over the past several years. )lso see, %arcellus region to provide 1*+ of total U,S, natural gas production this (onth -Dec. *, 2013.

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