Consider Oil & Gas Journal's statistics section to be a living, breathing animal. As such, on occasion, the section is required to adapt and change—sometimes shrink, sometimes expand—to better suit the needs of OGJ readers. Such adaptations can sometimes involve alterations to data that OGJ collects.
Every now and again, data sources and series are discontinued or data topics are deemed irrelevant to current trends, making modifications necessary. In this case, new data collected and analyzed have been proven to provide interesting statistical findings for OGJ's readers, thus prompting their addition to the statistics pages.
A new table
Effective in this issue, the statistics section (p. 34) is starting this new data series on Drilling Productivity Report (DPR). This new monthly data series—a product of the US Energy Information Administration—is an analytical and conclusive report based on outside data sources.
State agencies associated with certain regions collect well production, permit, and completion data. Baker Hughes Inc. provides rig and well data broken down by state and basin, and Drilling Info delivers "real-time rig location to estimate new wells spudded and completed throughout the US."
EIA focuses on six regions with significant shale production: Bakken, Eagle Ford, Haynesville, Marcellus, Niobrara, and Permian regions. A region is defined as all selected counties, including areas outside the tight oil or shale formations. Therefore, production included in the report is not restricted to just the shale formations in the region.
Though shale production is found in many regions of the US, the focus of the report is on these areas that have accounted for nearly 90% of US oil production increases and essentially all of US natural gas production increases in 2011-12.
Technologies for producing oil and gas and for drilling have changed in recent years as have the typical assessments of productivity. EIA's method does not differentiate between oil-directed rigs and gas-directed rigs because nearly half of all new wells drilled and brought to completion can produce both oil and gas.
The DPR, therefore, will show the current and preceding month and will estimate how much oil production can be forecast from new wells per average rig in a particular region. A new well is one that began production for the first time in the preceding month of reporting and categorized only as a new well for one month. Reworked and recompleted wells are not included in the method. This approximation is a measurement of rig productivity that incorporates both the time it takes to drill a well and the productivity of that well. The DPR will also report the estimation for new well gas production per rig.
EIA states, "Like traditional measures, the DPR makes use of recent rig activity data, but also explicitly considers recent information on wells drilled per active rig (rig productivity), average oil and natural gas production rates from new wells during their first full month of operation, and estimated changes in production from existing wells to develop estimates of overall changes in production for each region."
Summary findings
For the six regions tracked in the report, some interesting facts found that Bakken and Eagle Ford regions collectively have accounted for roughly 75% of current monthly oil production increases. Over the last year, oil production from these two regions has risen by 700,000 b/d.
The Marcellus region on its own had a 75% increase in gas production over the last year. Four out of the six regions saw increases in production growth.
Though active rig count numbers have risen, the current growth in oil and gas production is mainly due to drilling efficiencies and new well productivity.
