EIA Drilling Productivity Report Update – Sep ’20
According to the EIA’s September Drilling Productivity Report, Oct ’20 U.S. oil output is expected to decline to a three month low level. 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. Sep ’20 production levels were revised 150,000 barrels per day (bpd), or 2.0%, above levels previously forecasted, finishing 5,000 bpd, or 0.1%, above Aug ’20 production levels and reaching a five month high level. Oct ’20 production levels are expected to decline 67,000 bpd, or 0.9%, from the Sep ’20 revised production levels, however. The Oct ’20 projected month-over-month decline in oil production would be the first experienced throughout the past five months. Record large month-over-month declines in oil production were experienced throughout the months of April and May. Oil production is expected to decline most significantly from the previous month within the Eagle Ford (-28,000 bpd), Niobrara (-27,000 bpd) and Anadarko (-20,000 bpd) regions. The expected declines in Eagle Ford, Niobrara and Anadarko production levels more than offset an overall increase in oil production experienced throughout the other production regions. Production within the Permian (+23,000 bpd) region increased most significantly from the previous month, rebounding to a six month high level. Oct ’20 oil production is expected to remain lower on a YOY basis for the sixth consecutive month, finishing 15.9% below previous year levels. The projected YOY decline in Oct ’20 oil production would be the second largest on record, trailing only the May ’20 decline. Aug ’20 U.S. drilled-but-uncompleted (DUC) wells declined 1.0% from the six month high level experienced throughout the previous month, reaching a 20 month 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. Anadarko DUC wells declined most significantly from the previous month throughout Aug ’20, followed by Permian DUC wells. Permian DUC wells remained at the second highest monthly level on record however Anadarko DUC wells declined to a three year low level.