EIA Drilling Productivity Report Update – Aug ’21
According to the EIA’s most recent Drilling Productivity Report, U.S. oil output is expected to rebound to a 17 month high level throughout the month of September. 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 ’21 production levels were revised 130,800 barrels per day (bpd), or 1.7%, above levels previously forecasted, rebounding to a 16 month high level. Sep ’21 production levels are expected to increase by an additional 47,900 bpd, or 0.6%, from the Aug ’21 revised production levels, reaching a 17 month high level.
The Sep ’21 projected month-over-month increase in oil production would be the seventh experienced in a row and the largest experienced throughout the past five months. A pandemic related record large month-over-month decline in oil production was experienced throughout May 2020, while Feb ’21 production volumes were also reduced significantly due to deep freeze related slowdowns.
Oil production is expected to increase most significantly from the previous month within the Permian (+48,900 bpd) region. The projected increase in Permian production levels is expected to more than offset a combined 1,000 bpd decline in production levels experienced throughout the six other production regions. Oil production is expected to decline most significantly from the previous month within the Eagle Ford (-5,300 bpd), Anadarko (-4,000 bpd) and Bakken (-1,500 bpd) regions.
Sep ’21 oil production is expected to remain higher on a YOY basis for the fifth consecutive month, finishing 3.2% above previous year levels. Oil production had finished lower on a YOY basis over 12 consecutive months through Apr ’21. Sep ’21 oil production volumes are expected to remain 9.7% below 2019 seasonal levels, however.
Jul ’21 U.S. drilled-but-uncompleted (DUC) wells declined 4.2% from the previous month, reaching a three and a half year low level, overall. DUC wells, which have been drilled by producers but have not yet been made ready for production, have been compiled since Dec ’13. The monthly decline in DUC wells was the 13th experienced in a row.
Permian DUC wells declined most significantly from the previous month throughout Jul ’21, followed by Eagle Ford and Bakken DUC wells. Eagle Ford, Appalachia and Niobrara DUC wells all declined to the lowest levels on record.