EIA initiates new monthly Drilling Productivity Report
The U.S. Energy Information Administration (EIA) released today the initial edition of a new monthly Drilling Productivity Report (DPR) to provide region-specific insights into oil and natural gas drilling rig efficiency, new well productivity, existing well decline rates, and overall oil and natural gas production trends.
Given the importance of drilling productivity trends as a driver for future domestic oil and natural gas production, EIA has been developing new approaches to assess the productivity of drilling operations. The DPR, which initially will cover six regions, will also inform EIA’s own short-term production outlook. In 2011-12, these six regions accounted for 90% of domestic oil production growth and virtually all domestic natural gas production growth.
New technology used in drilling for and producing natural gas and oil — mostly since 2007 — made obsolete traditional indicators of future production such as simple counts of oil-directed and gas-directed drilling rigs in use.
Like the traditional indicators, the DPR makes use of recent rig activity data, but it also explicitly considers recent information on wells drilled per active rig (rig productivity), average oil and natural gas production rates from new wells during their first full month of operation, and estimated changes in production from existing wells to develop estimates of changes in production for each region. EIA’s approach in the DPR does not distinguish between oil-directed and gas-directed rigs — it counts all active rigs — because once a well is completed, it may produce both oil and gas, as more than half of all new wells do.
“The metrics presented in the Drilling Productivity Report are intended to be more informative than traditional indicators of future oil and gas production,” said EIA Administrator Adam Sieminski. “The report provides a new approach that takes into account changes in the application of technologies that have led to rapid increases in U.S. oil and gas production.”
The DPR provides a page summarizing results for all six regions, a more detailed page for each region, and a detailed description of the indicators developed and presented for each of the regions.
Some key findings of the October 2013 DPR include:
• Increases in drilling efficiency and new well productivity, rather than an increase in the number of active rigs, have been the main drivers of recent growth in domestic oil and natural gas production
• The Bakken and Eagle Ford regions together account for about 75% of current monthly oil production growth across the six regions tracked in the new DPR. Over the past year, production in these two regions increased by nearly 700,000 barrels per day. The Permian remains the biggest absolute oil producer, and grew by 93,000 barrels per day year-over-year
• Although natural gas production increased in 4 of the 6 DPR regions over the past year and the latest month, the Marcellus alone accounts for about 75% of natural gas production growth in the 6 regions over both periods.
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