Two of the nation’s most-prolific shale plays continue to see production numbers drop slightly.
The Eagle Ford Shale and Bakken formation produced less oil in January than in December, according to analytics and consulting group Platts Bentek. In fact, oil production from both Eagle Ford and Bakken formations reached their lowest levels since Platts Bentek started tracking them in October 2012.
Eagle Ford production dropped by nearly 11,000 barrels per day in January. The shale play averaged a total of 1.4 million barrels per day.
The Bakken produced 1.2 million barrels per day — a 3 percent decline from 2015 levels.
An estimated 1,022 wells in the Eagle Ford Shale and 831 in the Bakken have been drilled, but not completed. Wells drilled after October 2015 were not included in the figure. Companies typically wait to hydraulically fracture existing wells in a better price environment.
West Texas Intermediate, a grade of crude oil used as a benchmark in oil pricing, closed at $37.18 per barrel on Monday.
In June 2014, a barrel of oil sold for $107.
“Current internal rates of return in both the Eagle Ford and Bakken shales are weak, under 10 percent,” Platts Bentek analyst Sami Yahya said. “And producers need to continue generating cash flow for their operations. The number of active rigs in those basins has gotten so low that it is almost a certainty that producers are dipping into their inventory of drilled but uncompleted wells.”
Existing wells are cheaper to complete because there are no additional drilling costs.
Platts Bentek operates an independent daily price reference valuing crude oil produced from a shale formation.
Since the beginning of the year, oil out of the Eagle Ford Shale has ranged between $27.78/b and $39.03/b, according to Platts Bentek.
During the same time period, oil from the Bakken formation ranged from $24.69/b and 33.52/b.