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Permian growth to persist while other shales set production records, EIA says

Capital moving out of the Permian Basin due to pipeline constraints may have helped the Bakken and Niobrara shales and the Anadarko Basin reach record production levels, but the nation's most productive play continues to shatter records of its own.

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In its August "Drilling Productivity Report," the U.S. Energy Information Administration said Permian production surpassed 3.3 million barrels of oil per day and 11 Bcf/d of natural gas in July. Even with producers fighting for limited pipeline space, the EIA anticipates Permian production surpassing 3.4 MMbbl/d and 11.5 Bcf/d in September.

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One sign of the capacity issues gripping the Permian is the number of drilled and uncompleted wells in the play, which the EIA said has increased by more than 500 since March. The total stood at 3,470 at the end of July after 601 wells were drilled during the month but only 434 were completed.

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One possible beneficiary from the Permian's issues is the Niobrara, in Colorado and Wyoming. The EIA noted record oil and gas production for that play in July, with oil production cracking 600,000 bbl/d for the first time and gas production closing in on 5.1 Bcf/d. In September, the EIA expects Niobrara production to increase to more than 615,000 bbl/d and 5.2 Bcf/d.

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The Bakken Shale, which has become a popular oil producing substitute for the Permian, closed in on 1.3 MMbbl/d and 2.4 Bcf/d in July. The EIA expects production growth to continue, estimating that the Bakken will produce more than 1.3 MMbbl/d and nearly 2.5 Bcf/d in September.

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The gas-heavy Anadarko Basin surpassed the 7-Bcf/d production barrier in July, with oil production of more than 539,000 bbl/d. By September, the EIA estimates oil production will be closing in on 560,000 bbl/d, with gas production in excess of 7.2 Bcf/d.

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While regions around the country reported higher gas production totals, Appalachia continued to easily set the pace. The EIA reported regional production of more than 28.7 Bcf/d in July, a number that could increase to nearly 29.4 Bcf/d by September.