The Niobrara shale
The U.S. Energy Information Administration (or EIA) released its Drilling Productivity Report (or DPR) on April 13, 2015. The report estimates that the Niobrara shale produced 422 thousand barrels of crude oil per day in March. This is 0.7% more than production in February and 27% higher than the year-ago production.
Higher crude oil production in the Niobrara shale can benefit energy producers such as Noble Energy, Inc. (NBL), Bonanza Creek Energy, Inc. (BCEI), and Southwestern Energy (SWN). NBL and SWN together are 2.5% of the Energy Select Sector SPDR ETF (XLE). BCEI is 1.4% of SPDR S&P Oil & Gas Exploration & Production ETF (XOP).
Niobrara shale oil production increased from ~123 thousand barrels per day (or Mbbl/d) in March 2007 to ~422 Mbbl/d in March 2015. This marks an increase of ~241% in eight years.
Oil production per rig
The number of rigs in the Niobrara increased to 432 in March, from 423 in February. A year ago, there were 328 drilling rigs in the region.
As noted in the above graph, drilling efficiency in the Niobrara started to accelerate in the past year. By March, Niobrara produced 432 bbl/d per rig, or a 28% gain in production per rig since March 2014.
According to the EIA, the Niobrara shale in Colorado and Wyoming has become one of the fastest growing oil-producing regions in the United States.
Niobrara shale natural gas production
Natural gas production in Niobrara increased from an average of ~3.5 million cubic feet per day (or bcf/d) in 2007 to ~4.7 million bcf/d currently, a growth of ~36%. In March alone, Niobrara shale natural gas production increased 21 thousand cubic feet over the previous month.
Next, we’ll take a look at the Marcellus shale natural gas production.