Page 9 - NorthAmOil Week 07

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EIA forecasts slow short-term shale growth
US
THE US Energy Information Administra- tion (EIA) has forecast that short-term output growth will be slow across the country’s leading shale regions between this month and next. e agency’s monthly Drilling Productivity Report, released on February 18, forecast that oil produc- tion across the US’ top seven shale regions would only rise 18,000 barrels per day month on month in March, to 9.18mn bpd.
This will come after projected growth of 11,000 bpd in February on the previous month. Such low growth levels have not been seen in over three years.
Last month, the EIA predicted that output would expand by 22,000 bpd, to reach 9.2mn bpd in February, up from 9.18mn bpd in Janu- ary. However, the forecast has been scaled back to 9.16mn bpd for this month, with the March projection also falling short of what was previ- ously predicted for February.
Indeed, the only shale region where the EIA expects growth next month is the proli c
Permian Basin. e agency’s forecast of a 39,000 bpd output increase in the Permian is anticipated to o set at or falling production in the other regions covered by the report.
Meanwhile, the EIA has predicted that gas output across the seven shale regions will fall by 172mn cubic feet (4.9mn cubic metres) m/m to 85.4bn cubic feet (2.4bn cubic metres) in March. e Haynesville play, the bulk of which is located in Louisiana, and the Permian Basin are forecast to be the only two shale regions to see growth in gas output next month. e most dramatic monthly decline, of 220 mmcf (6.2 mcm) per day, is projected for the Appalachia region, which holds the Marcellus and Utica shale plays. Appalachia remains by far the largest shale gas output region in the US, however.
e EIA has been forecasting increasingly slower shale growth each month recently, as low oil and gas prices combined with investor pres- sure to force shale drillers to moderate drilling activity, prioritising capital discipline instead.™
North Dakota continues to struggle with flaring
NORTH DAKOTA
FLARING of associated natural gas production continues to pose challenges in North Dakota’s Bakken play – one of two shale regions in the US where a lack of takeaway and processing capacity has led to excess gas being routinely ared.
In a weekly natural gas update issued on Feb- ruary 13, the US Energy Information Adminis- tration (EIA) noted that e orts to reduce aring in North Dakota had been falling short of state targets. North Dakota introduced gas capture goals in 2014. e target is currently at 88% and is set to increase to 91% in November 2020, but according to the EIA it has not been met in every month since March 2018. In November 2019, the most recent month for which data are avail- able, only 83% of gas produced in North Dakota was captured, the EIA added.
is comes despite the expansion of gas-pro- cessing capacity in the state, as such capacity has continued to lag the growth in associated gas production.
North Dakota’s gas production reached 3.1bn cubic feet (88mn cubic metres) per day in November 2019, marking a more than tenfold increase compared with January 2010 levels. In the rst 11 months of 2019, the state ared about 20%ofitsgasoutput,or560mncubicfeet(15.9
mcm) per day, which was 40% higher than vol- umes ared in 2018.
Meanwhile, the latest estimates have shown that North Dakota produced over 500mn barrels of oil in 2019, according to local media, which would mark an increase of 60mn barrels on 2018 levels. is amount averages out to around 1.4mn barrels per day (bpd) – more than the state had predicted.
e North Dakota Department of Mineral Resources’ (DMR) director, Lynn Helms, noted last week that around 20% of drilling activity in the state was now outside the Bakken’s core areas. Helms has previously estimated that the state’s production would peak at around 1.8mn bpd at current prices.
“Now that doesn’t mean we’re done drilling in the Bakken. What that means is the best of the bestis nished,”Helmswasreportedassaying.™
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