US shale crude output to fall in December: EIA

OREANDA-NEWS. November 11, 2015. Crude output in major US shale basins will fall by 118,000 b/d to 4.95mn b/d from November to December, according the Energy Information Administration (EIA).

Production is expected to drop in the Bakken in North Dakota, Eagle Ford in Texas and Niobrara, spread across Colorado, Kansas, Nebraska and Wyoming. Output in the top-producing Permian basin in Texas should rise, the EIA said in its latest Drilling Productivity Report. Output is expected to fall by 93,000 b/d from October to November, the report had said last month.

The quickening pace of declines may validate analyst expectations that US output will flatten out for 2015, wiping out all gains that were made in the earlier part of the year when the slowdown in activity was more gradual. Almost all US shale producers, including ConocoPhillips, Marathon Oil and Chesapeake, plan to cut capital spending further by laying down rigs at a faster pace as the market weakness that saw prices plunge to six-and-a-half-year low extends beyond a year.

Key Bakken producer Continental Resources, which raised its full-year output to 24-26pc from a forecast of 16-20pc in December largely on the back of gains made earlier in the year, expects output to decline in the fourth quarter. It expects to exit 2015 at 210,000 b/d oil equivalent (boe/d) versus third quarter output of 228,278 boe/d.

Eagle Ford production is expected to fall by 78,000 b/d to 1.28mn b/d in December, according to the EIA. That would mark the ninth consecutive month of output declines in that south Texas field.

Bakken output in December should drop by 27,000 b/d to 1.11mn b/d. And Niobrara output is expected to fall by 22,000 b/d to 356,000 b/d.

Crude production in the Permian basin should rise by 11,000 b/d to 2.02mn b/d in December, however.

The report includes crude and natural gas production estimates in seven basins.

Utica crude output should increase slightly by 1,000 b/d to 80,000 b/d in December, while production in the Haynesville is expected to fall by 1,000 b/d to 53,000 b/d.

Marcellus oil production should fall by 2,000 b/d to 51,000 b/d. The Marcellus is the top US natural gas producing field, with gas output this month expected to top 15.6 Bcf/d.

The EIA's monthly report bases its estimates on the rig count combined with existing productivity data and estimated changes in existing production. The seven fields accounted for 92pc of US crude production growth and 100pc of natural gas production growth from 2011-2014, the agency said.