The steep drop in output from US shale wells is turning out to be worse than expected, forcing oil drillers to work even harder to keep production from slipping, research firm Enverus said in its latest report.
(Bloomberg) — The steep drop in output from US shale wells is turning out to be worse than expected, forcing oil drillers to work even harder to keep production from slipping, research firm Enverus said in its latest report.
The firm’s conclusion that there won’t be a surge of American oil production comes after the amount of crude extracted from US shale wells doubled in the past decade. The falling output rate over time highlights a fact of life for US shale explorers: oil wells are most prolific in early months of production, with gushers quickly turning to trickles. That reality is why oil output boomed during the shale revolution of the 2010s as companies chased production growth at all costs.
Read More: Shrinking Shale Output Sets In as Explorers Dial Back Drilling
Now, however, most of the land is already owned or leased, offering few opportunities to drill new areas with vast oil reserves. Companies are considering a range of drilling and production strategies to maximize what they get out of each well such as drilling wells closer together, which makes the shale patch a more dense and difficult place to increase the rate of production.
“Summed up, the industry’s treadmill is speeding up and this will make production growth more difficult than it was in the past,” said Dane Gregoris, managing director at Enverus Intelligence Research and author of the report published Tuesday.
In the Permian Basin of west Texas and southeast New Mexico, North America’s most productive oil field, the rate of well production in the Midland area has declined by 0.5% each year since 2014. Well production at the nearby Delaware region has fallen by even more since that time.
–With assistance from David Wethe.
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