US shale oil will surge to nearly 7 million barrels a day next month: Dept. of Energy forecast
American shale drillers will take aim at the seven million barrels-per-day mark next month, as U.S. oil production continues to hit new record highs.
Output from the nation’s shale oil regions is poised to grow by 131,000 barrels a day next month, according to the U.S. Department of Energy’s statistics arm.
The Energy Information Administration sees drillers in the seven shale regions pumping 6.95 million barrels a day in April, up more than 25 percent from a year ago. April’s forecast got a boost from upward revisions to EIA’s projections for previous months.
The Permian Basin in Texas and New Mexico will see production jump by 80,000 barrels a day, according to EIA’s outlook. The basin remains the biggest driver of a recovery in U.S. shale output that began in late 2016.
The Eagle Ford shale, also in Texas, is seen kicking in 23,000 barrels a day towards the regions’ growth. Meanwhile, North Dakota’s Bakken shale and the Niobrara region in Colorado and surrounding states will each grow output by 12,000 barrels a day, EIA projects.
Drillers across these regions use advanced technology like hydraulic fracturing and horizontal drilling to fracture rock formations and extract oil and gas from the basins.
U.S. shale regions, source: EIA
Just how much U.S. shale oil output can grow was a topic of debate throughout last week’s CERAWeek in Houston, one of the world’s biggest energy conferences.
Many executives said the industry is on the cusp of another leap forward as producers and service companies adopt a new generation of technologies like predictive analytics and machine learning.
Timothy Dove, president and CEO of Permian driller Pioneer Natural Resources, said the industry is at a technological “tipping point” that could lead to higher efficiency in the oil patch.
“We have the golden goose right before us, and it’s our job as operators to perform at a very high level of efficiency to bring this to bear,” he told an audience at CERAWeek.
But CERAWeek also brought out some naysayers, including shale drilling pioneer Mark Papa, who presided over a period of innovation as the head of EOG Resources. Papa warned that frackers have burned through the best wells in the Bakken and Eagle Ford, and it will become increasingly difficult to drill profitably there.
“Frankly, my sense is that the amount of total U.S. oil production growth is likely to disappoint over the next three or four years and come in below most people’s expectations,” Papa, now CEO of Centennial Resource Development, said during another CERAWeek panel.
In the short term, shale drillers are challenged by competition for the crews that perform hydraulic fracturing and other services as Permian business booms. Shareholder demands for frackers to rein in spending and start returning cash to investors are also seen potentially capping U.S. production growth in the medium term.
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