Eagle Ford, Bakken shale production on the decline

Oil production from two key shale fields in Texas and North Dakota is on the decline, according to analytics firm Platts Bentek.

The average oil production from the Eagle Ford Shale in South Texas in December was 1.5 million barrels per day, down by about 7 percent, or 110,000 daily barrels from the same month the year before.

Crude oil production from the North Dakota section of the Bakken formation in November was 1.2 million barrels per day, down about 6 percent over the same month the previous year.

The Bakken has been on a trend of “marginal decline” since the summer.

Output from the Eagle Ford has been falling since March 2015.

However, Platts Bentek said there was actually a small bump in Eagle Ford production in December – it was up 11,000 barrels per day, or less than 1 percent, from November.

“The small increase in crude production in the Eagle Ford shale is attributed to a slight resurgence in drilling activity in the region,” said Sami Yahya, Platts Bentek energy analyst, in a news release. “In December, the number of active rigs in the Eagle Ford reached 80, an increase of five rigs over the previous month. The brief rebound of active rigs is likely due to producers balancing their drilling programs and budgets for the fourth quarter and meeting their goals for wells drilled for the year.”

While the number of active drilling rigs has fallen like a rock in both regions (from 200 to 70 in the Eagle Ford and 150 to 50 in the Bakken), Yahya said companies and crews continue to get faster and better.

“It is survival of the fittest: the best and most efficient rigs and crews remain standing on the field,” Yahya said.

Despite the efficiency, the firm expects both the Eagle Ford and Bakken production to decline through most of 2016. There are wells in a backlog – those that have been drilled but not fracked yet – and completing those wells could help sustain production.

But prices below $40 per barrel are not encouraging financially-stressed energy companies to rush to make more oil.

“If prices remain sub-$40 per barrel and producers are unable to further bring down completion costs, then they might defer completions until the pricing market makes a comeback,” said Yahya.

Drillers already are coming out of a rocky 2015, when their oil sold at prices that deteriorated as the year wore on.

The Platts Eagle Ford Marker, a daily price assessment, tracked an average price of $52.01 per barrel for 2015, down 35 percent from 2014. Prices ranged from $36.76 to $66.23 per barrel last year.

The price of Bakken was an average of $45.24 per barrel last year, also down 35 percent over the previous year, according to the Platts Bakken assessment. Bakken oil ranged between $30.04 per barrel and $59.32 last year.

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