US natural gas production set to increase despite low prices
A new analysis from U.S. research and consulting firm Wood Mackenzie predicts that energy production from the Eagle Ford Shale in Texas will rise by 50 percent by the end of this year, reaching an average volume of 844,000 barrels per day.
Texas and the Gulf of Mexico are not the only areas predicted to see a jump in production. Longer-term projections foresee energy production continuing to increase across the country and by 2020 some parts of the United States, including the Northeast, are expected to double their current gas output, the analysis also noted.
The report on North American energy production, released last week, pointed out that the main driver of growth will be the steady increase in tight oil production, including oil from the Eagle Ford and other shale rock formations, FuelFix reported.
Researchers at Wood Mackenzie concluded that U.S. natural gas production had the potential to grow over the coming years despite low natural gas prices. The report pointed out that gas production in the country is economical at prices of at least $4 per million British thermal units, but currently prices are about $3.50. Still, production in the Northeast has not suffered because of the relatively low cost of drilling operations there, researchers pointed out.
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An estimated $150 billion will be invested in developing onshore oil and natural gas projects this year, with tight oil accounting for at least 40 percent of that, Wood Mackenzie predicted. Investments in the field will drive tight oil production to over five million barrels per day by 2019. The Eagle Ford shale in Texas and the Bakken Shale in North Dakota and Montana are expected to produce about half of that volume, researchers believe.
Meanwhile, a promising future is predicted for the Wolfcamp and Cline Shale in West Texas. According to Wood Mackenzie, oil production from its reserves is projected to soar by 76 percent by 2018. Over the next five years, the Wolfcamp and Cline is likely to double its share from the current seven percent of the total volume of oil extracted in the Permian Basin.
The projected growth in U.S. crude production is expected to reduce imports to about 15 percent by 2020, down from the current 44 percent of overseas crude on the market.
Meanwhile, new data from Baker Hughes' quarterly count of American wells has revealed that over the past four quarters 4,092 new wells were drilled in the Eagle Ford Shale. In the second quarter of 2013 there were 1,050 new ones, suggesting that each rig in the region drilled an average of 4.56 wells. Overall, there were 9,061 new wells in the Permian Basin in West Texas in the last four quarters, meaning that the region leads the way in terms of new wells in the Unites States. The Bakken Shale had 2,357 wells, while the Marcellus Shale in Pennsylvania had 1,801 new wells over the same period.