March 17, 2015

Falling Rig Counts Drive Projected Near-Term Oil Production Decline In 3 Key U.S. Regions

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March 17, 2015 | U.S. Energy Information Administration | Jozef Lieskovsky, Richard Yan

The U.S. Energy Information Administration estimates crude oil production in three of the country’s most important oil producing regions will decline for the first time since the agency began publishing its monthly  Drilling Productivity Report in October 2013.

Production in the Bakken formation in North Dakota and Eastern Montana, the Eagle Ford formation in Texas, and the Niobrara formation in Wyoming and Colorado is set to decline this and next month as companies continue to idle lower yield wells.

However, the agency says overall oil production is still expected to increase despite low oil prices because of gains in other oil producing regions. And The Wall Street Journal reports oil companies are not slowing down as much as was expected when crude prices plummeted last fall. Rather, companies are focusing efforts on their best fields. Also, many are producing wells up to the hydraulic fracturing stage and then moth-balling them for quick finishing if prices rebound.

This doesn’t mean the oil fields have not had their problems. We recently reported on a rise in oil field theft in the Lone Star State.