AP NEWS

Shale production

September 18, 2018

A new report shows that West Texas’ Permian Basin will continue to post the biggest oil production gains of any U.S. shale field in October.

The report by the Department of Energy predicts the Permian will add 31,000 barrels of production in October, bringing overall production close to 3.5 million barrels a day. The Eagle Ford Shale in South Texas is expected to add 16,000 barrels a day of oil production, bringing its production — the second highest in the country — closer to 1.5 million barrels a day.

The production gains in the Permian come despite tightening pipeline capacity, which is said to have fallen below production. Companies are financing the development of an additional 2.1 million barrels a day of crude oil pipeline capacity to bring oil out of the Permian and to the Texas Gulf Coast, primarily to the Corpus Christi region.

A recent report by Wells Fargo said a slowdown in the Permian was coming faster than expected, pointing to a weakening in the pressure pumping business, which is used to hydraulically fracture or frack shale rock to release oil and gas.

Wells Fargo analysts said in July that pipeline constraints in the Permian could last through early 2020.

The energy research firm Wood Mackenzie recently estimated that oil production in the Permian has reached 3.6 million barrels a day, while pipeline capacity out of the region is 3.5 million barrels a day.

The Bakken oil field in North Dakota, another major oil and gas shale development, is expected to add 14,000 barrels a day of oil production to more than 1.3 million barrels a day.

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