By Ovi
All of the Crude plus Condensate (C + C) production data, oil, for the US state charts comes from the EIAʼs Petroleum Supply monthly PSM which provides updated information up to July 2024.
U.S. July oil production dropped by 25 kb/d to 13,205 kb/d. The largest decreases came from Texas, 34 kb/d and North Dakota, 20 kb/d.
US oil production has been essentially flat since September 2023 when it was 13,177 kb/d. July is down by 103 kb/d from the December 2023 high of 13,308 kb/d.
The dark blue graph, taken from the September 2023 STEO, is the forecast for U.S. oil production from August 2024 to December 2025. Output for December 2025 is expected to reach 13,919 kb/d. From August 2024 to December 2025 production is expected to grow by 526 kb/d or at an average rate of 30.9 kb/d/mth.
The red OLS line from June 2020 to December 2023 indicates a monthly production growth rate of 65 kb/d/mth or 780 kb/d/yr. Production going forward is projected to increase at about 1/2 that rate.
The light blue graph is the STEO’s projection for output to December 2025 for the Onshore L48. July Onshore L48 production is down by 38 kb/d to 10,922 kb/d. From August 2024 to December 2025, production is expected to increase by 467 kb/d to 11,605 kb/d.
US Oil Production Ranked by State
Listed above are the 11 US states with the largest oil production along with the Gulf of Mexico. Ohio has been added to this table since its production approached 100 kb/d in January and exceeded Louisiana’s production. These 11 states accounted for 83.9% of all U.S. oil production out of a total production of 13,205 kb/d in July 2024.
On a MoM basis, July US oil production dropped by 25 kb/d. Note that the top 3 states had an overall MoM decline of 29 kb/d. On a YoY basis, US production increased by 270 kb/d. GOM production increased by 2 kb/d MoM while dropping by 120 kb/d YoY.
State Oil Production Charts
Texas production decreased by 34 kb/d in July to 5,706 kb/d. YoY production is up by 146 kb/d.
The red graph is a production projection for Texas using the Texas RRC reported June and July oil production. The projection uses the cumulative difference between the June and July preliminary production data provided by the Texas RRC. The projection is directionally correct with the EIA Texas data from April until July and both the EIA and the projection show a production drop for July.
For July the projection is low by 72 kb/d. The low production estimate from April to July could be due to a processing delay by the Texas RRC.
The blue graph shows the average number of weekly rigs reported for each month, shifted forward by 10 months. So the 276 rigs operating in July 2023 have been shifted forward to May 2024. From February 2024 to July 2024, the rig count dropped from 312 in time shifted February 2024 to 256 in July 2024. That drop of 56 rigs did not begin to impact production until July 2024. So if production should follow the rig count, Texas production should continue to decline going forward.
According to the EIA, New Mexico’s July production rose by 25 kb/d to 2,035 kb/d.
The blue graph is a production projection for Lea plus Eddy counties. These two counties account for close to 99% of New Mexico’s oil production. The projection used the difference between the June and July preliminary production data provided by the New Mexico Oil Conservation Division. While last month’s projection was very close to the EIA’s data, a gap has developed in the July forecast. Both show an increase for July but the projection is 89 kb/d lower than the EIA’s forecast. A 1% correction was added to the Lea plus Eddy projection to account for their fraction of New Mexico’s oil production.
Note the methodology used to project New Mexico’s production is the same as that used for Texas.
More oil production information for these two counties and Texas counties is reviewed in the special Permian section further down.
July’s output decreased by 20 kb/d to 1,161 kb/d. YoY production was down by 12 kb/d. The North Dakota DMR reported that oil production dropped by 18 kb/d in July to 1,168 kb/d. Production is down by 126 kb/d from the post pandemic peak of 1,287 kb/d.
According to this article, North Dakota’s oil production drop in July was less than expected because well completions were up from 55 in June to 79 in July.
“We’re at 1.167 million barrels per day, said North Dakota Department of Mineral Resources Oil and Gas Division assistant director Mark Bohrer, in the monthly ‘Director’s Cut’ media briefing. He said the good news is well completions were up — from 55 in June to 79 in July.
“That appears to have slowed the decline a little bit,” Bohrer said. “I hope to see that turn around and stabilize.”
Bohrer said wells permitted in July reached 100, which he said would help oil production once they came on-line. He also said natural gas production was down .9 percent in July, compared with June.
Alaskaʼs July output rose by 9 kb/d to 408 kb/d while YoY production up by 11 kb/d. The rise in production is an indication that summer maintenance is winding down. Typically Alaska’s production drops in the summer months due to maintenance.
Coloradoʼs July oil production decreased by 4 kb/d to 446 kb/d. Colorado has moved ahead of Alaska to become the 4th largest US oil producing state. Colorado began the year with 12 rigs but has now dropped to 10 during June, July and August and down to 7 in late September.
Oklahoma’s output in July dropped by 9 kb/d to 378 kb/d. Production remains below the post pandemic July 2020 high of 476 kb/d and is down by 74 kb/d since May 2023. Output entered a slow declining phase in June 2023.
Oklahoma’s rig count dropped from 40 in May to 30 in July. By the end of September there was an uptick to 41 operational rigs. Will the increase in the rig count reverse the current dropping production trend?
California’s declining production trend continues. Californiaʼs July production dropped by 2 kb/d to 283 kb/d.
Wyoming’s oil production has been rebounding since March 2023. However the rebound was impacted by the January 2024 storm. July production was down by 1 kb/d to 289 kb/d and may be entering a plateau phase. Note that production has almost recovered to the pre-Covid level.
July’s production increased by 6 kb/d to 192 kb/d. Utah has had 9 oil rigs in operation through out 2024.
Ohio has been added to the Louisiana chart because Ohio’s production has been slowly increasing since October 2021 and passed Louisiana in November 2023.
Louisiana’s output entered a slow decline phase in October 2022. July’s production was unchanged at 87 kb/d. Ohio’s July oil production added 5 kb/d to 100 kb/d, a new high. The most recent Baker Hughes rig report now shows two horizontal oil rigs operating in Ohio in July, August and September.
GOM production rose by 2 kb/d in July to 1,805 kb/d but is expected to rise by 51 kb/d in August to 1,856 kb/d.
The September 2024 STEO projection for the GOM output has been added to this chart. It projects production from August 2024 to December 2025 will rise by 51 kb/d to 1,907 kb/d.
A Different Perspective on US Oil Production
The Big Two states combined oil output for Texas and New Mexico.
July’s production in the Big Two states decreased by a combined 9 kb/d to 7,741 kb/d with Texas dropping 34 kb/d while New Mexico added 25 kb/d.
Oil production by The Rest
July’s oil production in The Rest dropped by 27 kb/d to 3,251 kb/d and is 208 kb/d lower than November 2023.
The main takeaway from The Rest chart is that current production is below the high of October 2019 and is a significant loss that occurred during the Covid shut down and will not be readily recovered. Note that production is now lower than Sept 2020 post covid rebound to 3,292 kb/d.
The OnShore L48 W/O the big three, Texas, New Mexico and North Dakota, shows production is on a plateau in the range of 2,125 ±75 kb/d from January 2023.
July’s production decreased by 7 kb/d to 2,090 kb/d. The two biggest contributors with declines were Texas with 34 kb/d and North Dakota with 20 kb/d.
Permian Basin Report by Main Counties and Districts
This special monthly Permian section was recently added to the US report because of a range of views on whether Permian production will continue to grow or will peak over the next year or two. The issue was brought into focus recently by the Goehring and Rozencwajg Report which indicated that a few of the biggest Permian oil producing counties were close to peaking or past peak. Also comments by posters on this site have similar beliefs from hands on experience.
This section will focus on the four largest oil producing counties in the Permian, Lea, Eddy, Midland and Martin. It will track the oil and natural gas production and the associated Gas Oil Ratio (GOR) on a monthly basis. The data is taken from the state’s government agencies for Texas and New Mexico. Typically the data for the latest two or three months is not complete and is revised upward as companies submit their updated information. Note the natural gas production shown in the charts that is used to calculate the GOR is the gas coming from both the gas and oil wells.
Of particular interest will be the charts which plot oil production vs GOR for a county to see if a particular characteristic develops that indicates the field is close to entering or in the bubble point phase. While the GOR metric is best suited for characterizing individual wells, counties with closely spaced horizontal wells may display a behaviour similar to individual wells due to pressure cross talking . For further information on the bubble point and GOR, there are a few good thoughts on the intricacies of the GOR in an earlier POB comment. Also check this EIA topic on GOR.
New Mexico Permian
The total rig count in Lea and Eddy counties in late September 2024 is down 9 from the August 2023 high of 104 rigs.
Since the middle of January, the Lea county rig count has increased from 40 rigs to 50 in late September. At the same time production has increased to 1,185 kb/d over the period January 2023 to May 2024. However due to a time lag between rig count and production, Lea County has entered a declining phase for the next several months before production may begin to rise again. See next chart.
At its peak in late March 2024, Eddy county had 55 rigs operating and are now down to 45 rigs at the end of September. However production is rising due to the increase in the rig count starting in October 2023. See Eddy oil production chart further down.
Comparison chart from last month to compare with the current July chart below.
This chart is indicating that oil production in Lea County is following the drilling chart delayed by 8 months.
In the previous June update, the following was noted: “The June update made a total upward revision of 48 kb/d to production between the months March 2023 to June 2023. This revision shifted both the original June OCD data and the projection upward and created a big gap between the June data and the projection. The previous posts showed almost no changes between the original data and the projection after one year, see comparison chart above.”
Based on the above statement, this warning statement was added: ‘While this is what the model forecasts, I don’t think it is correct and it will be sorted out next month, provided the production revisions are more typical.
Next month has arrived, the revisions are more typical and the charts have sorted themselves out. As can be seen in the latest chart, the July OCD graph and July projection fall on top of each other because the New Mexico drillers get their data in on time and the NM government processes it very quickly. Note the difference between the July chart (no red/green gap) and the comparison June chart (red/green gap).
The biggest change from the June chart is that production appears to have peaked in May at 1,185 kb/d and has dropped for two months and should continue to drop for the next three months. July production dropped by 23 kb/d to 1,114 kb/d
The blue graph shows the average number of weekly rigs operating during a given month as taken from the weekly rig chart. The rig graph has been shifted forward by 8 months. So the 64 Rigs/wk operating in August 2023 have been time shifted forward to April 2024 to show the possible correlation and time delay between rig count and oil production.
Note that rig counts are being used to project production as opposed to completions because very few extra DUCs are being completed at this time.
After much zigging and zagging, oil production in Lea county stabilized just above 1,000 kb/d in early 2023. Once production reached a new high in January 2023, production rose more slowly while the GOR started to increase rapidly to the right and entered the bubble point phase in July 2023.
Since July 2023 the Lea county GOR has continued to increase as production increased within a second semi-bounded GOR. This may indicate that the current production increase is coming from a new bench/field since the GOR’s behaviour since August 2023 to March 2024 time frame appears once again to be in a semi bounded GOR phase accompanied with rising production.
However in April, May and June 2024, the GOR moved out of the Second semi bounded GOR region and production reached a new high 1,182 kb/d in May along with an another increase in the GOR. The GOR increase since May along with dropping production is another indicator that Lea county has entered the bubble point phase for a second time and that production in the near term indicates that Lea County may be past its peak.
This zigging and zagging GOR pattern within a semi-bounded GOR while oil production increases to some stable level and then moves out to a higher GOR to the right has shown up in a number of counties. See an additional two cases below.
Eddy County oil production is now following the drilling chart. What is surprising is that July production is higher than February.
Eddy county oil production hit a projected high of 802 kb/d in February 2024. The NM OCD projection estimates that the production forecast for July increased by 40 kb/d to 813 kb/d, a new high. The large production increase in July is due to the average number of rigs increasing from 35.5 to 41.5. Those wells that were drilled approximately 8 months ago came online in July and boosted July production to a new high.
In earlier posts the following was noted “Something is happening in Eddy county which will take at least six months to show up.”
The results of that drilling increase are now starting to show up. The GOR chart below indicates that the wells are being drilled into a new bench or a new field nearby. If someone could provide some insight on where production is increasing in Eddy County, it would be appreciated. Is drilling occurring in a new field or has a new bench been found?
The blue graph shows the average number of weekly rigs operating during a given month as taken from the above weekly drilling chart. The rig graph has been shifted forward by 8 months to roughly coincide with the increase in the production graph starting in October 2023.
If production were to follow the rig count trend going forward, production should continue to rise for the next few months.
Last month the following was stated. “The beginning of a new rising trend does not mean that production will exceed the February peak of 802 kb/d. It is the increasing legacy decline that will limit how much production can increase from the May low.” My Bad. Time for a rethink
The Eddy county GOR pattern is similar to Lea county except that Eddy broke out from the semi bounded range earlier and for a longer time and then added a second semi bounded GOR phase.
August 2023 saw a reversal in the increasing GOR trend which then was followed by the current oil production increase which reached a new high in February 2024 of 797 kb/d and exceeded it in July, an atypical pattern. This behaviour appears to indicate a second semi-bounded GOR phase while production rises has started, possibly associated with production from a new bench or field.
Texas Permian
The rig count in Midland county has been dropping since July 2023. Midland county rigs have continued to drop and reached a low of 18 in July. They have rebounded to 25 at the end of September. Rigs are down close to 33% from where they were in July 2023.
Martin county rigs have bee rising rapidly since the beginning of August. At the end of September the rig count had increased by 7 to 25.
Midland County production has peaked.
Midland County’s slow and steady declining oil production phase started in August 2023. The green graph shows July’s preliminary production as reported by the Texas RRC. Midland county’s June preliminary production reversed the dropping trend and increased the projected production by 16 kb/d to 580 kb/d and is essentially flat for July at 582 kb/d.
The orange and green graphs show the production reported by the Texas RRC for June and July. Note that the last month in the July production graph is higher than the last month in the June production graph.
The blue graph shows the average number of weekly rigs operating during a given month as taken from the weekly drilling chart. The rig graph has been shifted forward by eight months. So the average 34.5 Rigs/wk operating in July 2023 have been moved forward to February 2024 to show the possible correlation and time delay between rig count and oil production. If the eight month shift in the rig count is approximately correct in that oil production can be tied to the rig count, oil production in Midland county should increase for a month or two before resuming its decline.
With Midland county deep into the bubble point phase, oil production has dropped significantly from October 2022 and the GOR continues to increase. Note that oil production and GOR in this chart is based on the RRC’s preliminary July production report.
Martin County is on a plateau and close to its peak and could be on the verge of entering its decline phase.
This chart shows Texas RRC oil production for Martin County. It was showing initial signs of peaking in November 2023 but was then followed by declining production into January 2024. Production has been tracking the increasing rig count according up to May but has diverged since then. May, June and July production has been flat relatively flat, 723 kb/d, 724 kb/d and 728 kb/d respectively, 54 kb/d higher than the November peak of 674 kb/d.
The blue chart shifts the rig count ahead by 6 months. Note the three flat spots in the November, December and January rig count and similar flat spots in production a few months later.
The red graph is a production forecast which the Texas RRC could be reporting for Martin county about one year from now as the Texas RRC reports additional updated production information. This projection is based on a methodology that used June and July production and will be re-estimated each month going forward. Production is expected to fall in August since it has defied the rig count for a few months,
The orange and green graphs show oil production reported by the Texas RRC for June and July.
Martin county’s oil production after November 2022 increased and at the same time drifted to slightly higher GORs within the semi bounded range. July’s preliminary gas and oil production indicates that production was almost flat along with the GOR moving further out of the semi-bounded area.
Martin county has the lowest GOR of the four counties at a GOR of close to 2.60 but for July jumped to 2.83, out of the semi-bounded region. Martin County may have entered the bubble point phase that should result in a dropping oil production trend shortly.
This chart shows the total oil production from the four largest Permian counties. Assuming that current July Permian production is close to 6,300 kb/d, these four counties account for close to 50% of the total. If their combined production has peaked, the Permian has peaked. A few more months of data is required to determine if the Permian has peaked or is on a plateau.
July production rose by 22 kb/d to 3,236 kb/d. The June and July initial production data is shown in the orange and green graphs respectively. The red graph uses the June and July data to project an estimate for the final July production. The increase in July production is largely due to the 40 kb/d increase from Eddy county.
Findings
– Lea County oil production is following the rig count graph and may have peaked.
– Eddy County oil production initially peaked in February 2024 but has now started a new increasing phase as it follows the uptrend in the rig count and has exceeded the previous February peak.
– Midland county peaked in July 2023.
– Martin County is on a plateau prior to heading into its decline phase.
A note on assumptions. In the above charts of production vs rig count, the rig count has been shifted forward by 6 to 8 months and the assumption is made that production follows rig count. The underlying assumption for doing that is that no more or very few DUCs are being used. Also implicit in making the above calls is that the drillers and frackers are using the latest technology, i.e. 3 mile laterals, max proppant and chemicals and some refracs. I have no basis for assuming this assumption is correct.
Texas District 8
Texas District 8 has peaked.
Texas District 8 contains both the Midland and Martin counties. Combined these two counties produce close to 1,300 kb/d of oil. While these two counties are the two largest oil producers, there are many other counties with smaller production, Reeves #3, Loving #4 and Howard #5 that produced a total of 3,632 kb/d of oil in November 2023. Essentially the Midland and Martin counties produce close to 36% of the District 8 oil.
This chart shows a projection for District 8 oil production. The red graph, derived from the June and July production data indicates that oil production in District 8 has peaked. July production rose by 25 kb/d to 3,520 kb/d and is down 112 kb/d from the peak in November 2023.
The orange and green graphs show the production reported by the Texas RRC for June and July. Note that the last month in the June production graph is higher than the last month in the May production graph. This is why the projection shows July’s production is higher than June’s.
District 8 accounts for more than 50% of Texas production. With July’s preliminary production being lower than November’s 3,632 kb/d, it is difficult to understand how the EIA’s Texas production has continued to increase since February. However July saw the first drop in Texas oil production since January. Has District 8’s dropping production trend finally started to show up in Texas’ overall production? The next few months will tell the tale.
Plotting an oil production vs GOR graph for a district may be a bit of a stretch. Regardless here it is and it seems to indicate many District 8 counties may well be into the bubble point phase.
Three Texas Counties
These three counties are ranked #3, #4 and #5 in terms of Texas oil production. All three have peaked.
Drilling Productivity Report
The Drilling Productivity Report (DPR) uses recent data on the total number of drilling rigs in operation along with estimates of drilling productivity and estimated changes in production from existing oil wells to provide estimated changes in oil production for the principal tight oil regions. The new DPR report in the STEO provides production up to August 2024. The report also projects output to December 2025. The DUC charts and Drilled Wells charts are also updated to August 2024.
The August 2024 oil production for the 5 DPR regions tracked by the EIA is shown above. Also a projection by the STEO to December 2025 has been added, red markers. Note DPR production includes both LTO oil and oil from conventional wells. Production for the Anadarko and Niobrara regions is no longer available.
The DPR is reporting August oil output in the five regions increase by 59 kb/d to 9,037 kb/d. Production is expected to grow by 26 kb/d in September to 9,063 kb/d. By December 2025 production is expected to reach 9,478 kb/d. This is 29 kb/d higher than forecast in the previous update.
According to the EIA’s September DPR report, Permian output will be flat from August to January 2025. It is expected to decrease by 7 kb/d to 6,457 kb/d in January 2025. By December 2025 output is expected to be 6,728 kb/d, 22 kb/d lower than estimated in the previous report.
Production from new wells and legacy decline, right scale, have been added to this chart to show the difference between new production and legacy decline.
What is surprising is that production from new wells and legacy decline are different. They should be the same since production is flat? That has to make one question whether those numbers are correct?
The August production increase was 21 kb/d. According to the new production/decline graphs, August production should have increased by 46 kb/d?
Output in the Eagle Ford basin has been declining since June 2023 but started to recover in June 2024. For August production increased by 15 kb/d to 1,101 kb/d. Production is expected to reach 1,162 kb/d in December 2025. The red graph is a production projection by the STEO.
The DPR/STEO forecasts Bakken output in August will rise by 19 kb/d to 1,297 kb/d. The STEO projection out to December 2025 shows output varying between 1,300 kb/d and 1,370 kb/d over the next 18 months.
This chart plots the combined production from the three main LTO regions. For August output rose by 57 kb/d to 8,849 kb/d. Production in December 2025 is expected to reach 9,268 kb/d. This is 128 kb/d lower than forecast in the previous report.
DUCs and Dilled Wells
The number of DUCs available for completion in the Permian and the three major DPR regions has fallen every month since July 2020. August DUCs decreased by 27 to 1,512. In the Permian, the DUC count decreased by 8 to 876.
In the three primary LTO regions, 617 wells were completed and 590 were drilled, i.e. an extra 27 DUCs being completed. Of the 27, 12 extra were completed in both the Bakken and Permian. This indicates that there are still some profitable DUCs available.
In the Permian, the monthly completion and drilling rates have been both stabilizing in the 430 to 450 range over the last eight months.
In August 2024, 442 wells were completed while 430 new wells were drilled. This is the Fourth month in which the number of wells completed exceeded the number of drilled wells. Based on the DPR Permian chart above. it appears that these extra 12 completed wells are allowing production to stay on a plateau.