Feds to scrutinize drilling boom with new well data

WASHINGTON — The Energy Department is poised to shed more light on today’s oil and gas drilling boom, with a closer look at the longevity of new wells that are tapping dense rock formations across the U.S.

In a new monthly report debuting on Tuesday, the department’s Energy Information Administration will provide data on the productivity of new wells, the decline rates of old ones and overall production in six drilling hotbeds.

The six regions — including the Eagle Ford Shale, Permian Basin and Haynesville Shale in parts of Texas — accounted for 90 percent of domestic oil production growth and virtually all U.S. natural gas production gains from 2011 to 2012, as energy companies combine hydraulic fracturing and horizontal drilling to unlock the hydrocarbons buried deep underground.

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The report comes amid scrutiny of the steep production declines associated with the hydraulically fractured wells — particularly in the Bakken formation spanning Montana and North Dakota — and continued concerns about the lifespan of the projects. Critics note that companies must keep drilling new wells — and continuously pick up the pace — to replace the big production drop-offs.

The report also responds to a growing hunger for data that goes beyond traditional metrics to give a more complete picture of unconventional tight oil and gas development. In July, Baker Hughes started tracking the number of onshore oil and gas wells in the United States, going beyond its famous rig counts.

In a preview of the new report, the EIA said its “metrics are intended to be more informative than traditional indicators such as simple counts of oil-directed and gas-directed drilling rigs in use.” The EIA added:

“The drilling production report synthesizes several different types of information to shed light on the current rate of growth or decline in production based on indicators including the active rig count, drilling efficiency and the productivity of new wells, and production and depletion trends for previously producing wells.”

The EIA had not foreshadowed this new report before, but the agency cast it as part of its work to create “new approaches to assess the productivity of drilling operations . . . given the importance of drilling productivity trends as a driver for future domestic production.”

Numbers in the monthly report will be incorporated in the EIA’s short-term production outlooks.