About half of the oil produced in the continental United States last year came from wells drilled after January 2014, according to the U.S. Energy Information Administration. The data provides insight into the importance of short-cycle shale production and advances in oil industry technologies.
Many companies are targeting short-cycle investments, lower-cost projects that take months, rather than years, to come online.
Chevron plans to focus on short-cycle shale fields in the Permian basin, rather than costly deepwater projects. Though shale wells can be costly themselves, there are fewer risks involved, and companies can reap benefits more quickly.
With a large number of short-cycle wells, the EIA expects average U.S. production to fall 7.4 percent in 2016 – about 700,000 barrels a day. Despite an increase in shale oil production during the past few years, individual wells have steep decline rates, losing nearly 70 percent of initial production in the first year.
“Constant drilling and development of new wells is necessary to maintain or increase production levels,” the EIA said. “Oil production from new wells has so far been able to keep U.S. crude production from falling significantly below its level in late 2014.”
With the U.S. rig count down 76 percent since late 2014, oil production will have a tough time keeping up recent levels. The EIA expects U.S. oil production to decline through 2017.