Projections from the latest "Drilling Productivity Report" from the U.S. Energy Information Administration show that shale oil production could be as much as 1.6 million barrels per day lower in August than it was in January.
The EIA reported that unconventional oil production averaged 9.1 million bbl/d in January and increased to 9.12 million bbl/d in February before beginning a rapid decline. With the effects of the price collapse and the COVID-19 pandemic still taking their toll, the EIA now estimates shale oil production will average 7.49 million bbl/d in August.
The Permian Basin, which averaged production of 4.78 million bbl/d in January, is expected to see shale oil production decline to 4.15 million bbl/d in August, the lowest level in the play since March 2019. Production in another Texas play, the Eagle Ford Shale, is expected to fall to approximately 1.11 million bbl/d in August; in January, shale oil production in the Eagle Ford stood at 1.41 million bbl/d.
One play that is bucking the trend of declining production is the Bakken Shale, which the EIA projected will grow production for a third straight month to 1.11 million bbl/d in August. The play, which saw several of its major producers rapidly shut in production in March and April, is now seeing some of that production brought back online. Production in the Bakken, which stood at 1.44 million bbl/d in March, fell to 1.24 million bbl/d in April and 1.01 million bbl/d in May before starting to rebound.
Shale gas production is also expected to continue a multi-month decline, with the EIA projecting production of 79.55 Bcf/d in August, falling below 80 Bcf/d for the first time since May 2019. Appalachia, the largest unconventional gas producing region in the nation, is projected to have production of 32.71 Bcf/d, its lowest total since August 2019. Shale gas production in the Permian, which is largely connected to oil production, is expected to fall to 15.39 Bcf/d, which is 1.5 Bcf/d below January's daily average.
The dry gas Haynesville Shale is also expected to see its production decline extend into August. Production in the play, which was above 12 Bcf/d as recently as May, is projected to average 11.67 Bcf/d in August.
