.The Texas Energy Report

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.The Texas Energy Report

Study forecasts more increases in US oil production

By Alex Mills

Even though there appears to be signs of weakening in the crude oil and natural gas production boom in the U.S., a new report from the Energy Information Administration (EIA) predicts continued production increases through 2020.

EIA revised its Short-Term Energy Outlook this week forecasting a 119,000 barrels per day (b/d) increase in oil production in 2020 over 2019. EIA says oil production will increase to 12.3 million b/d this year, which is up from 11 million b/d in 2018.

EIA increased its U.S. benchmark West Texas Intermediate (WTI) crude oil price forecast by $2 per barrel in November to $56 and by $1 in both December and January to $55 and $54, respectively. The slight increase in crude oil prices also contributed to EIA’s increased production forecast for the first half of 2020 because of EIA’s assumption of a six-month lag between a crude oil price change and a production response.

The Permian Basin of West Texas and East New Mexico continue to lead the way. EIA forecasts Permian production will grow by 915,000 b/d in 2019 and by 809,000 b/d in 2020. EIA based production increases in the Permian Basin on the expansion of pipelines in the area allowing for more crude oil and natural gas to be shipped to consumers and relieving the price reduction because of oversupply…..
 

Texas Oil and Gas Production Statistics for August 2019

November 8, 2019

Crude oil and natural gas production as reported to the Railroad Commission of Texas (RRC) for August 2019 came from 176,054 oil wells and 88,823 gas wells.

The RRC reports that from September 2018 to August 2019, total Texas reported production was 1.427 billion barrels of crude oil and 9.5 trillion cubic feet of total gas.

Crude oil production reported by the RRC is limited to oil produced from oil leases and does not include condensate, which is reported separately by the RRC……
 

Natural Gas Prices Down, Inventories Up As Winter Approaches

By Alex Mills

 

November 8, 2019

Record production of natural gas in Texas and throughout the United States has created lower natural gas prices for consumers, but it has many companies that produce natural gas struggling to avoid bankruptcy.

Once such company is Chesapeake Energy Corp., which is based in Oklahoma City, who was actively exploring in the Barnett Shale of North Texas some 10 years ago when gas prices were three time more than today. Chesapeake warned this week that low prices, which averaged $2.38 (down 11.5 percent), will contribute to a negative financial performance during the third quarter. Shares dropped 13 percent to $1.35 initially. Chesapeake was the second largest natural gas producer in the U.S. just a few years ago.

The Energy Information Administration (EIA) reports a growing share of U.S. natural gas production is associated natural gas (natural gas produced from oil wells), which is the result of increased crude oil production from low permeability, tight rock formations. In 2018, associated-dissolved natural gas production in the five major crude oil-producing regions was 12.0 billion cubic feet per day (Bcf/d), or about 37 percent of total natural gas production in these regions and about 12 percent of total U.S. natural gas production.

The Permian region, which spans parts of western Texas and eastern New Mexico, has the most associated gas production of the five crude oil-producing regions, according to EIA. The Permian region produced 5.8 Bcf/d of associated gas in 2018, accounting for 51 percent of the Permian’s natural gas production total and surpassing non-associated gas production in the region for the first time. Record-high crude oil production from the Permian brings with it large volumes of associated gas.

Associated natural gas production in the United States increased from 4.3 Bcf/d in 2006 to 15.0 Bcf/d in 2018.

Working natural gas inventories in the Lower 48 states totaled 3,519 billion cubic feet (Bcf) for the week ending October 11, 2019, according to EIA. This is the first week that Lower 48 states’ working gas inventories have exceeded the previous five-year average since Sept. 22, 2017……