U.S. Oil Production Growth is slowing

[dan_s]

This will be discussed at our Houston luncheon on July 31st.

There has been a significant decline in the number of rigs drilling for oil. Plus, lots of the Tier One areas have been drilled up. Result: U.S. oil production growth has been flat since the end of March.

On July 22 World Oil reported accelerating tight oil decline rates top a growing list of concerns for Permian basin operators, with unexpected production shortfalls prompting producers to consider stepping up drilling investment and M&A activity, Wood Mackenzie's Robert Clarke, Research Director, Lower 48 Upstream, told delegates at the Unconventional Resources Technology Conference (URTeC) in Denver. As ultra low-cost undrilled locations become exhausted and productivity gains across wider sections of acreage continue to moderate, producers should shift their focus from early production rates to longer-term well performance and production optimization, Clarke said. Clarke told delegates “Individual well productivity improvements helped to offset decline rates through 2017, but those gains have weakened over the past two years. No longer do we routinely see operators press-releasing record-setting wells. For wells drilled so far this year in the Midland Wolfcamp, average initial production (IP) rates are down 6% and we see productivity reductions across numerous benches.”