The Next Big U.S. Shale Play

 

Media coverage of the U.S. shale oil and gas industry makes it sound like the Permian is the only place where things are happening. Everybody is buying acreage in the Permian, selling acreage in other shale plays, and production costs are falling the fastest in that same Permian.

True as this may be, this shale play is by no means the only one where production is growing. In fact, oil and gas output across the shale patch has been growing, as the Energy Information Administration’s latest drilling productivity report shows. And that’s not all because there is a new actor on stage: Powder River Basin in Wyoming.

OPEC Is Winning The Price War Says IEA

Oil markets may not balance until late 2016, but supply is finally contracting in a big way.

Early last week the EIA confirmed that U.S. oil production was down sharply since peaking in April at 9.6 million barrels per day (mb/d). The agency estimates that U.S. output fell by 140,000 barrels per day in August, a steeper decline than in previous months. In its latest weekly estimate (which is less accurate than monthly retrospective estimates), U.S. oil production is now down to just 9.1 mb/d.

US Shale Declining And OPEC Still Climbing

Essentially, OPEC has killed off the U.S. shale industry, which was predicted last year. See the OPEC category for further articles on Saudi Arabia’s economic warfare scheme against the United States.

 

 

There is new data out today. The EIA published their International Petroleum Statistics yesterday. The EIA also published their Drilling Productivity Report which gave their expected shale oil and gas production through September. Then this morning OPEC published their Monthly Oil Marketing Report with OPEC crude only production numbers through July.

First the Drilling Productivity Report. Of course most of the Drilling Productivity Report is projection, not history. And that projection goes through September 2015.

The EIA has the Bakken peaking in December and declining 107 thousand barrels per day since that point. A secondary peak was reached in April and declining steadily since then.

World Entering “Golden Age of Gas”

Bloomberg published a lengthy article on the proliferation of shale gas drilling around the world, with interviews from top oil and gas executives. Drillers are trying to replicate the U.S. shale gas revolution in places such as China, Russia, India, South Africa, Australia, Argentina, the U.K, and Poland, among other places, according to the report. For example, Shell is working with Sinopec to tap the world’s largest shale gas reserves in China; Chevron teamed up with YPF SA to drill the massive Vaca Muerta shale formation in Argentina; and oil and gas companies are lining up to move into Mexico to drill the Mexican side of the Eagle Ford shale.