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Texas oil and gas production has taken a ‘huge hit’

Texas oil and gas production has taken a ‘huge hit’ thumbnail

The preliminary Texas RRC Production Data is out this morning. There appears to be a considerable drop in Texas crude oil production in April. All Texas RRC data in the charts below is through April 2015 and all EIA data is through March 2015.

As always, the Texas RRC data is incomplete. The drooping lines will eventually, after the final data comes in, closer resemble the EIA data. Though I believe the EIA data is quite a bit too high at this point.

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It appears that, when the final data comes in that Texas will have took a huge hit in January, recovered somewhat in February and March, then took another hit this past April.

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Dr. Dean Fantazzini, with his algorithm that calculates the final production numbers, also comes to the conclusion that Texas took a hit in April production. Dean has three results with the most probable in the middle.

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Texas Crude only, in April, when the final data comes in, should be slightly above January but still well below December.

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Dean’s corrected data shows Texas crude only declining in January, recovering in February and March, then declining again in April.

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Condensate took a far greater hit in April than did crude only. This is likely because natural gas production in April took a bigger hit than did oil production.

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This is Dean’s take on what Texas Condensate will be when the final data comes in. December appears to be the peak… so far.

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There is no doubt that North Dakota, the USA’s second largest producer, is down since December. And I believe the data clearly shows that Texas, the USA’s largest crude oil producer by far, is down also. Then how is it possible that the EIA has US Production up so much since December?

In the chart above as well as the one below, the weekly production data are the averaged per month. The June weekly numbers are the average of the last two weeks reported data.

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This is what the three different reporting departments say has happened to US C+C production since December 2014. I believe this will turn out to be the largest production error in the history of the agency.

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It appears that Texas Natural Gas took a bigger hit than did oil. All natural gas data is in MCF.

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This is Dean’s estimate of what the final Texas natural gas production will look like. The peak, so far, is in December, just like crude oil.

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Texas gas well gas peaked way back in April of 2009. In April it was Texas gas well gas that took the biggest hit of all.

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Texas associated gas did not take nearly the hit that gas well gas did. This is gas from oil wells. So it appears that even though oil production did take a hit in April, natural gas took an even bigger hit.

oilprice.com


13 Comments on "Texas oil and gas production has taken a ‘huge hit’"

  1. rockman on Tue, 23rd Jun 2015 8:34 am 

    The absolute numbers from the TRRC may correct over time but look at the trend: the rise in Texas oil production didn’t begin to level off in early 2015…it began in Sept 2014. And as always remember that the production from shale wells that came on last fall was from wells that were initially spudded 3 to 6 months earlier given the lag time between spudding, frac’ng and initial production. Thus the reduction in production increase was the result of the slow up in drilling that began in the early summer of 2014…about 1 year ago. And now they are reporting a significant decrease in April production which, again due to lag time, would correlate very well with the rig count drop in 1Q 2015.

    Cornies can rationalize it anyway they want. But by the end of 2015, if oil prices stay at the current level, there will be little argument that the shale boom is over IMHO.

  2. Nony on Tue, 23rd Jun 2015 1:59 pm 

    You just need to watch out for this issue of the reporting lag. It makes any firm pronouncement from RRC data, risky. I can buy a DEC max. After all, the price signal had been coming in by OCT. And there is a normal winter slowdown, on top of the coming months with low prices. Summer max makes no sense (it’s not even consistent with the Rockman comments about a 6 month lag…that would be more like a 6 month ahead!

    I think the comments about August max (previously you might have even had an earlier max) are just way, way too much from looking at the peculiar shapes of the Texas RRC reports over the months. But you can go back two years and see that they ALWAYS have a max a few months before. Of course, this doesn’t mean you won’t have an eventual peak. Just that you can’t judge it very easily at the time.

    North Dakota is much better. The adjustments are tiny (less than a percent) and pretty much happen in the first month. With Texas, you get significant changes going on for several months.

  3. Nony on Tue, 23rd Jun 2015 2:13 pm 

    BTW, there’s really no cornie denial. That is just the peaker website commenter mindset to want to divide everyone into sides and not able to face facts that support different views.

    Even before the price bust, I said price would turn the boom. (I pointed to the Bakken in 2009 as an example.) And I was one of the ones who said it would turn fast and hard, when asked in DEC. Maybe a DEC or JAN max. If anything, it has hung in there, sort of plateaued, a lot better than I expected. I was ready for some massive shark fin or at least the bell curve that we saw from the Bakken in 2009.

    I think although the intrinsic decline of a new shale well is massive, there is still at least 50% US production that comes from old, conventional wells, some of which are very low decline. Plus even the shale plays are maybe 30-50% decline with no drilling, since there are some older wells in the inventory. (higher decline in newer plays, lower in the Bakken.) Then even with rigs cut by 60%, you still have the Pareto issue of production. IOW, they cut exploration, they cut marginal projects. And no, I don’t think there was any magic efficiency gain…just “80-20” principle. It cuts both ways. Both peakers and cornies need to think about that.)

    Being down a few percent from the max at year end, maybe even less than that from year start is not some massive drop. And since there was high growth in 2014, it is a pretty good guess that 2015 will be above 2014 on a year versus year averaged basis.

  4. Northwest Resident on Tue, 23rd Jun 2015 3:57 pm 

    “There’s really no cornie denial.

    Sounds like stone cold denial to me.

    How’s life in Nony World today? Everything wonderful? Oil flowing in gushers? Econ 101 beneficially regulating market activity for the benefit of all? Any and all nasty resource extraction and resulting pollution miles away on the other side of the planet where you can’t see it or be bothered with it? Wow, Nony World must be a wonderful place to live.

    Thanks for the laugh.

  5. Dredd on Tue, 23rd Jun 2015 4:18 pm 

    It is really bad when a hard case of denial denies the denial.

    https://www.youtube.com/watch?feature=player_detailpage&v=8Wh6L3axxWc

  6. Apneaman on Tue, 23rd Jun 2015 4:39 pm 

    nony-marm, the boy with no shame. The same creature who is always screaming at the top of his keyboard for everyone to “admit it!!!!” including long dead people.

  7. Davy on Tue, 23rd Jun 2015 4:44 pm 

    NOo said “There’s really no cornie denial.”

    I am seeing a corny denying the cornies deny. NR, is that a snake oil salesman eating his tale.

    NOo, you love links tell me how this one is:
    http://dreamsnest.com/snake/snake-or-serpent-eating-its-own-tail/

  8. zoidberg on Tue, 23rd Jun 2015 5:06 pm 

    I don’t suppose anyone believes in a simple 2 coiumn spreadsheet with one for monthly barrells or boe produced and one for month. This bunch of graphs and estimations is hard to read.

  9. Nony on Tue, 23rd Jun 2015 5:18 pm 

    http://peakoil.com/geology/is-eagle-ford-peaking

    Here we are more than a year ago, with the same issue of the Texas RRC data having lags. You can go even further back to the linked Roger Blanchard article to see how this happens. (His 600,000 peak call for the Eagle Ford, which he called optimistic, looks amusing in retrospect.)

  10. Nony on Tue, 23rd Jun 2015 5:24 pm 

    zoid:

    The RRC product itself is in a simple table. You can get it off their website.

    I actually enjoy Ron’s graphs (nice familiar look to them). I don’t agree with all his interpretations–he is too quick to believe peaker things and disbelieve cornie things…but he does make an effort to look at the data objectively. I also think he tries to read a bit too hard into little wiggles and makes too firm of pronouncements. But you can pretty much ignore his views and still get great value out of his articles…nice content syntheses and enjoyable prose.

  11. Nony on Tue, 23rd Jun 2015 5:58 pm 

    Davy, love the Ouroboros meme, man.

    http://www.imdb.com/title/tt2397535/

    Everything old will be new again in its time.

  12. Davy on Tue, 23rd Jun 2015 6:17 pm 

    NOo that some great sci-fi. Just imagine if they could send me back to 1900 and I could doom the world on fossil fuels. I could save us all from ourselves. Yet, NOo; if I did that wouldn’t we never of been?

  13. Kenz300 on Wed, 24th Jun 2015 1:12 pm 

    If we are to have any hope of dealing with Climate Change we need to reduce then end our reliance on fossil fuels.

    Wind, solar, wave energy ,and geothermal are safer, cleaner and cheaper………

    Renewables to Beat Fossil Fuels With $3.7 Trillion Solar Boom – Renewable Energy World

    http://www.renewableenergyworld.com/news/2015/06/renewables-to-beat-fossil-fuels-with-3-7-trillion-solar-boom.html

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