No Steep Decline In U.S Oil Production Expected Anytime Soon
Increased oil output in the US has kept World oil output from declining over the past few years and a major question is how long this can continue. Poor estimates by both the US Energy Information Administration (EIA) and the Railroad Commission of Texas (RRC) for Texas state wide crude plus condensate (C+C) output make it difficult to predict when a sustained decline in US output will begin.
About 80 to 85% of Texas (TX) C+C output is from the Permian basin and the Eagle Ford play, so estimating output from these two formations is crucial. I have used data from the production data query (PDQ) at the RRC to find the percentage of TX C+C output from the Permian (about 44% in Feb 2015) and Eagle Ford plays (40% in Feb 2015).
Dean’s estimates of Texas C+C output are excellent in my opinion and are close to EIA estimates through August 2014. I used EIA data for TX C+C output through August 2014 and Dean’s best estimate from Sept 2014 to Feb 2015. By multiplying the % of C+C output from the RRC data with the combined EIA and Dean’s estimate, I was able to estimate Eagle Ford and Permian output. The chart below shows this output in kb/d.
The following chart shows the combined Permian and Eagle Ford output from 2012 to 2015 in kb/d, this chart is not zero scaled.
Below I have created a few scenarios for the Bakken and Eagle Ford. This analysis is based on the pioneering work by Rune Likvern at the Oil Drum (Red Queen series) and his blog at Fractional Flow, any errors in analysis are mine. I doubt that Mr. Likvern would speculate beyond 2 years forward in time (or he has not done so in the past). The data gathered from the North Dakota Industrial Commission (NDIC) by Enno Peters was also instrumental in the Bakken/Three Forks model.
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