EIA July drilling productivity report out

The EIA monthly drilling report is out, and there is an interesting new feature showing YOY data instead of just MOM.  There is just so much information in these reports.  We can see how the Bakken growth does seem to have slowed a bit, even as rig productivity there continues to improve.  The slowed growth seems to have come from reductions in rig count.  The reduction in rig count could be for any one of a number of reasons.  Perhaps the majority of acreage is now HBP, so there are increases in efficiency from pad drilling.  There may be capacity and take-away constraints that some operators are running up against.  There also are rumors that there will be flaring penalties which could force the companies to put a lot more into gas collection infrastructure, and limit the pace of growth in the near term.

Also, even with an infinite number of drilling locations, production will eventually plateau as old wells decline cancels out production growth from new wells.  The production chart from any of the major plays still looks a long way off from plateau though.

I think one of the most interesting things that has happened over the past year has been the very dramatic increase in drilling productivity (as measured by EIA) in the Niobrara region.  "new oil production per rig" has basically doubled in the past year, although a portion of this could be due to increased use of horizontal instead of vertical rigs.  The Niobrara production isn't taking off Eagleford style, but it does seem like this may become a very significant region.