The US has fewer wells, but is extracting oil at record levels. How do they do it ?
Despite declining or stable well numbers, U.S. crude oil production managed to reach a monthly record high in August 2023, supported by productivity gains and more efficient operations.
This is because companies have changed the way they exploit wells. U.S. exploration and production companies are drilling longer lateral sections and installing rigs in the most promising areas to get the most bang for their buck.
U.S. crude oil production in fields reached 404.6 million barrels during August, new EIA data showed this week, averaging 13.05 million barrels per day , far exceeding the previous record set by US drillers in July of 401.73 million barrels.
The largest actual increase was seen in PADD 2, which includes North Dakota, Illinois and Kentucky, among other states, but all mining areas saw increased production.
In Texas, the top oil-producing state, crude oil production reached a record high of 5.7 million barrels per day (bpd) in August, according to the most recent monthly energy economic analysis conducted by Texas Oil's chief economist & Gas Association Dean Foreman.
“ Texas oil and natural gas production has reached record levels despite relatively modest drilling activity. Productivity gains and exploitation of drilled but not yet completed wells provided an advantage ,” Foreman wrote in late September.
Permian producers in Texas and New Mexico and other shale plays have boosted crude oil production despite losing 117 rigs so far this year, according to Baker Hughes data from Oct. 27.
US crude oil producers have been abandoning rigs for much of the year, while rig counts essentially stabilized in October.
Part of the production increases were due to the time lag between a significant change in oil prices and actual production: as Reuters columnist John Kemp notes, “It takes on average about 12 months for a change in prices to translate into a change in production."
But the main driver of the production increases has been greater efficiency in drilling and other operations. The U.S. shale sector is now trying to do more with less, seeking capital and operational efficiencies to demonstrate to shareholders that it has turned the page from growth at all costs to measured growth accompanied by higher returns for investors.
Oil and gas companies operating from the Permian to the Marcellus shale play are drilling deeper and deeper lateral wells as there are fewer rigs, but the wells are longer.
Between July and September, oil and gas activity in Texas, southern New Mexico and northern Louisiana increased and was driven by the exploration and production (E&P) side of business, according to industry executives oil and gas industry in response to latest Dallas energy report. Fed energy survey.
Most executives, 84%, said they expect the number of U.S. oil rigs six months from now to be close to current levels, with 14% predicting a much higher number of wells six months from now and only l '1% expects the number to be much higher. inferior.
In the latest Short-Term Energy Outlook (STEO), the administration expects U.S. crude oil production to average 12.92 million barrels per day this year and 13.12 million barrels per day next year.
In its August outlook, the EIA noted that despite the decline in rig count, “increased well productivity has offset the decline in active rigs so far in 2023.”
“In 2024, we expect the number of active facilities to increase, helping to increase crude oil production in the second half of the year.”
So the USA is increasingly becoming an oil exporting nation and this only thanks to greater extraction efficiency. This also improves the overall quantity of oil extractable in the world.
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The article The USA has fewer wells, but is extracting oil at a record level. How do they do it ? comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/gli-usa-hanno-meno-pozzi-ma-estraggono-petrolio-a-livello-record-come-fanno/ on Sun, 05 Nov 2023 16:55:12 +0000.