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Latest data on US shale output indicates that production continues to rise. But it also shows that prices are rising and that efficiency is falling.
The EIA’s latest Drilling Productivity Report, released 15 May, indicates that output from the country’s key Permian shale formation is set to hit 2.421mn b/d in May and 2.492mn b/d in June, both record highs with the latter up 500,000 b/d on a year earlier.
The only solace for Opec is that the “new well oil production per rig,” a measure of productivity, is down. Having peaked at 680 b/d in February, the metric fell to 650 b/d in April and an expected 640 and 630 in May and June, respectively. This indicates that as activity has ramped up drilling is moving beyond the ‘sweet spots’ and also that increasingly that the additional rigs and crews being pressed into service are not as efficient as those already in action. (CONTINUED - 248 WORDS)