Hydraulic fracturing operations in the Permian shattered old records in June, according to Rystad Energy.
The prolific shale basin in Texas and parts of New Mexico in the US has reached new heights in terms of the number of fracked wells – both on a daily basis and in terms of absolute monthly wells.
Rystad Energy estimates there were as many as 18 wells fracked per day across the entire Permian Basin, or almost 550 wells during the month of June. Previously, fracking in the Permian peaked at approximately 520 wells fracked in August 2018, while the peak daily rate was reached in February earlier this year.
“The Midland platform has undoubtedly been the driver of this upwards trend with consistent month-over-month increases,” says Oleksii Shulzhuk, senior analyst on Rystad Energy’s shale team. “According to our latest estimate, fracked wells totaled 339 in June 2019, constituting a whopping 70% growth since the first quarter of 2019, when an average of 200 wells were fracked per month.”
Rystad Energy is able to confirm this relatively recent upward trend after dissecting the latest data from the FracFocus Chemical Disclosure Registry, to which operators report their wells and fracking activity.
Average fracking activity in the US was rather flat over the spring months, with just a single well per day increase in both March and April 2019, followed by a decline of two wells per day in May. The tides turned in June with an increase of five wells per day across all major shale-producing regions in the US. This surge was supported especially by the “Big Three” oil plays (Permian, Eagle Ford and Bakken) and the SCOOP/STACK play in Oklahoma.
“This latest batch of fracking activity confirms our belief that prospects look promising for US shale production in the second half of the year. Going forward we might still experience some positive surprises from fracking activity as we observe cases of back-loaded activity this year for selected players. However, we must also recognize that the high numbers achieved in June could turn out to be the peak fracking rate for all of 2019,” Shulzhuk remarked.
US shale production has seen continuous growth since reaching a low point in 2016, and is expected to keep growing in the medium term, albeit at a slower rate. By the end of 2019, light oil supply in the US is forecasted to reach 9 million barrels per day (bpd), according to Rystad Energy. The Permian Basin will be the key contributor to oil production growth going forward.
Note: The chart depicts the progression of the fracfocus.org dataset over time. In most of the US, operators are required to report fracking activity to FracFocus, ostensibly within 90 days of well completion. The delay between when a well is fracked and when it appears in the FracFocus database can range from one week to more than a year in some rare cases, with the average time period at about three months. The blue lines show the time series of wells fracked per day, where each line is a different snapshot from the database. The dark blue line is the most recent data, with the two lighter blue lines representing the previous two most recent datasets. Rystad Energy estimates the reporting lag to fill in the missing data. The solid red line is our current estimate while the dotted red line was the estimate using the previous iteration of the data. The red bars are confidence intervals.