Associated natural gas production out of the Permian Basin rebounded sharply a few weeks ago, indicating production curtailments that went into effect in May in response to low crude oil prices are coming back online. Just as abruptly as gas production dived in early May, it lurched upward in late June, nearly back to where it was before the shut-ins began. But the rig count has continued falling to a record low, and indications are that many of the wells drilled over the past few weeks have not been completed. The meager drilling and completion activity suggests that the natural declines of existing wells, which were temporarily exaggerated by the shut-ins, will now be felt — and felt for as long as rig counts remain depressed — not just in the Permian but also in other oil-focused basins. Daily gas production volumes in the Permian in the past 10 days or so already are slipping, despite shut-ins tapering. Today, we examine the latest production trends in the Permian and what it will mean for the gas production outlook.
Gimme Some Truth – Permian Well Shut-ins Wind Down, But Natural Declines Extend Oil, Gas Downturn
