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Why April’s Eagle Ford Natural Gas Production Fell 9% in a Year

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May. 18 2016, Published 3:19 p.m. ET

Eagle Ford natural gas production

The EIA (U.S. Energy Information Administration) released its Drilling Productivity Report on May 16, 2016. The EIA estimated that natural gas production at the Eagle Ford Shale was ~6.7 Bcf (billion cubic feet) per day in April 2016. That’s 2.4% lower than March 2016’s production level and 9% lower than production in April 2015.

Last month’s production fall was the seventh in a row. However, according to the EIA, the Eagle Ford Shale’s natural gas production has risen 306% in the last eight years. In April 2008, the region produced 1.6 Bcf per day.

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Eagle Ford crude oil production

Shale crude oil production at the Eagle Ford Shale rose from ~55,000 bpd (barrels per day) in April 2008 to ~13.3 MMbpd (million barrels per day) in April 2016. That’s a ~23x rise in eight years.

Rigs and monthly additions from the average rig

The number of rigs working at the Eagle Ford Shale fell from 47 in March 2016 to 42 in April 2016. In April 2015, there were 137 drilling rigs in the region.

The EIA calculates that the average Eagle Ford Shale rig added production of 3.0 MMcf (million cubic feet) per day in April 2016, a 146% rise over April 2008. In the 12 months leading up to April 2016, the production addition per rig rose 31%. Higher production per rig benefits natural gas producers.

What this means for energy companies

The falling Eagle Ford rig count and production can negatively affect oilfield services companies’ revenues and profits. These companies include C&J Energy Services (CJES), FMC Technologies (FTI), Patterson-UTI Energy (PTEN), and Helmerich & Payne (HP).

Oilfield services companies may continue to lose revenues and profits if drilling activity in the Eagle Ford Shale falls. Helmerich & Payne forms 1.4% of the iShares Select Dividend ETF (DVY).

In the next part of this series, we’ll look at production at the Utica Shale.

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