• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 3 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 14 hours How Far Have We Really Gotten With Alternative Energy
  • 9 days They pay YOU to TAKE Natural Gas
  • 6 days What fool thought this was a good idea...
  • 8 days Why does this keep coming up? (The Renewable Energy Land Rush Could Threaten Food Security)
  • 4 days A question...
  • 15 days The United States produced more crude oil than any nation, at any time.
Why the IEA is Wrong About Peak Oil Demand

Why the IEA is Wrong About Peak Oil Demand

The International Energy Agency (IEA)…

Oil Ticks Higher on Inventory Draw

Oil Ticks Higher on Inventory Draw

Crude oil prices moved higher…

Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

More Info

Premium Content

How The U.S. Is Pumping More Oil With Fewer Rigs

  • U.S. crude oil production hit a monthly record in August 2023, with an average output of 13.05 million barrels per day, breaking the previous month's record.
  • Production increases were driven by efficiency, particularly in Texas and new drilling methods, offsetting a decrease in active drilling rigs.
  • Oil and gas executives expect the number of rigs to stabilize, while the EIA projects continued production growth into the next year.
Oil Rigs

Despite the falling and flatlining rig count, U.S. crude oil production managed to hit a monthly record-high in August 2023, boosted by productivity gains and more efficient operations. 

U.S. exploration and production companies are drilling longer laterals and deploying rigs to the most promising areas to get more bang for their buck. 

U.S. field production of crude oil reached 404.6 million barrels during the month of August, new EIA data showed this week, for an average of 13.05 million barrels per day—squarely breaking the previous record U.S. drillers set in July of 401.73 million barrels. 

Increases in production were seen in PADDs 1, 2, 3, and 4, with the largest percentage increase in production seen in PADD 4, which comprises Colorado, Idaho, Montana, Utah, and Wyoming. The largest actual increase was seen in PADD 2, which includes North Dakota, Illinois, and Kentucky, among other states. 

In Texas, the top oil-producing state, crude oil production reached a record high of 5.7 million barrels per day (bpd) in August, per the most recent monthly energy economic analysis by Texas Oil & Gas Association (TXOGA) Chief Economist Dean Foreman. 

“Texas’ production of oil and natural gas has achieved records despite relatively modest drilling activity. Productivity gains and leveraging wells that have been drilled but not yet completed have provided a tailwind,” Foreman wrote at the end of September.  

Producers in the Permian in Texas and New Mexico and the other shale plays have boosted production of crude oil despite a loss of 117 rigs so far this year, per Baker Hughes data as of October 27. 

U.S. crude oil producers have been shedding rigs for most of the year, while the rig count largely stabilized in October. 

Part of the production gains were due to the time lag between a significant shift in oil prices and actual production—as Reuters columnist John Kemp notes, “it takes on average about 12 months for a change in prices to filter through into a change in output.” 

But the main driver of production gains has been higher efficiency in drilling and other operations.  

The U.S. shale patch is now looking to do more with less as it seeks capital and operational efficiency to prove to shareholders that it has turned the page from growth at all costs to measured growth accompanied by higher returns to investors. 

The oil and gas firms operating from the Permian to Marcellus shale plays are drilling increasingly deeper lateral wells as drilling rigs are fewer, but wells are longer.

Despite the loss of active drilling rigs, shale firms are producing more oil and gas and have even exceeded some skeptical projections from earlier this year. 

Between July and September, activity in the oil and gas sector in Texas, southern New Mexico, and northern Louisiana increased and was driven by the exploration and production (E&P) side of the business, according to oil and gas executives responding to the latest Dallas Fed Energy Survey.

Most executives, 84%, said they expect the number of U.S. oil rigs six months from now to be near current levels, with 14% anticipating a much higher number of oil rigs six months from now and only 1% expecting the number to be much lower. 

Despite expectations of a flat number of rigs, U.S. crude oil production is growing, although at a slower pace than before the pandemic. The Energy Information Administration (EIA) has been raising slightly its estimates for American oil output in recent months. 

ADVERTISEMENT

In the latest Short-Term Energy Outlook (STEO), the administration expects U.S. crude oil production to average 12.92 million bpd this year and 13.12 million bpd next year. 

In the August outlook, the EIA noted that despite the falling rig counts, “increased well productivity has offset the decline in active rigs so far in 2023.”  

“In 2024, we expect the number of active rigs to increase, helping to grow crude oil production in the second half of the year.” 

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment
  • Mamdouh Salameh on November 05 2023 said:
    We only have the word of the US Energy Information Administration (EIA) for this and it is questionable and will remain so until we get an independent assessment about US oil production. That what veterans of the US shale oil revolution have been demanding for years but to no avail.

    The rigs may have fallen but the hype by the EIA hasn’t. And without an independent assessment, the EIA production figures remain pure hype.

    A more realistic US production in my view ranges from 10.0-11.0 million barrels a day (mbd)

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News