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EIA: Production Gains Across All Shale Fields, Despite Oil Price Drop

by Kenneth E. DuBose on October 27, 2014

Despite lower crude prices, data released by the Energy Information Administration (EIA) shows gains in production across all major U.S. shale fields. According to the International Energy Agency (IEA), only 4% of U.S. shale production needs prices above $80 for drillers to break even. 

Production growth translates into good news for mineral owners, but lower commodities prices could have a negative affect on future drilling in the coming year, if the slide continues. On October 27, 2014, benchmark crude oil price WTI (West Texas Intermediate) was $80.63. At the end of September, it was ~$93.00.

Gains in Texas

The Eagle Ford Shale in South Texas is expected to produce 1.614-million b/d of oil in November, a 29% increase from the same time last year, and a ~2% increase from October’s expected production of 1.579-million b/d.

The Permian in West Texas is expected to produce 7.765-million b/d by the end of the month. In November, production is expected to increase ~2% to 1,807-million b/d.

Gains in North Dakota and Montana

The Bakken Shale is expected to produce 1.193-million b/d of oil in November, up 22% from the same time last year. October’s total production from the play is expected to be 1.164-million b/d.

In April of 2014, consultancy Wood Mackenzie issued a report that estimated break-even costs in the Bakken based on sub-plays. Break-even rates in the Sanish basin, one of the better areas for development in the Bakken, are estimated to average $58/bbl, according to the Wood Mackenzie report. Break-even costs were higher in other areas of the play.

Texas and North Dakota, which encompasses the most active area of the Bakken, currently make up almost half of the nation’s crude oil supply. Production data sourced from the EIA’s Drilling Productivity Report.

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