Tight oil production rises, producers focus on Permian region

U.S. tight oil production increased in 2017 and accounted for 54% of all crude oil production in the United States, as productivity increases in new wells, according to the U.S. Energy Information Administration. Since 2007, average first full month of oil production from new wells has increased in regions the EIA follows. The productivity increases have led tight oil production to increase while drilling slowed when oil prices declined.

The regions the EIA follows include Niobrara, Bakken, Anadarko, Permian and Eagle Ford, and for nearly the past 10 years, new wells in the regions have produced more oil than older wells. The rise is attributed to more effective drilling techniques, such as the increased use of hydraulic fracturing and horizontal drilling, and these techniques have increased production rates. The injection of more proppant during hydraulic fracturing and the ability to drill longer horizontal components, or laterals, have increased productivity.

In 2015, when crude oil prices and the number of rigs declined, the rise in well productivity supported tight oil production, according to the EIA. In 2016, the number of rigs continued to fall and tight oil production decreased for the first time in 10 years. Fewer wells were drilled, but of those that were drilled, they were drilled more quickly and were in more productive areas, leading to a rise in well production and profitability.

The number of rigs has continued to recover from the declines in 2015 and 2016, as oil producers focus on the Permian region, which includes western Texas and eastern New Mexico. The geological structure in the region is more complex than other regions and requires more time for drilling and completion technology. But it’s larger and offers more potential for oil production compared to other regions. Production and production per new well have risen in the region for 11 consecutive years.