EIA: Oil and gas production growing in Anadarko region

By Staff | August 29, 2017

Production in the Anadarko Region of Oklahoma and Texas has continued to increase during 2017, now accounting for 13 percent of all new wells drilled in the country during July, according to the Energy Information Administration (EIA)

The Anadarko region contributed 437,000 barrels per day of oil production and 4.9 billion cubic feet per day of natural gas production in July 2017. With the inclusion of the Anadarko Region, EIA’s weekly Drilling Productivity Report (DPR) now includes about 87 percent of all active onshore rigs in the United States.

The Anadarko Region covers a large portion of western Oklahoma and the northeast corner of the Texas panhandle. The region has recently seen an increase in activity, mainly from two areas commonly known as the STACK (Sooner Trend Anadarko Canadian and Kingfisher) and the SCOOP (South Central Oklahoma Oil Province) plays.

The new region was defined in the DPR by identifying the most prolific oil-producing counties in the area. In 2010, the U.S. Geological Survey completed an assessment of the entire Anadarko Basin and estimated mean technically recoverable undiscovered resources of 495 million barrels of oil, 27.5 trillion cubic feet of natural gas, and 410 million barrels of natural gas liquids.

The new-well production per rig in the Anadarko Region as reported in the DPR was 372 barrels per day (b/d) in July 2017, lower than in other oil-producing DPR regions. For example, production per rig in the Permian and Bakken were 609 b/d and 1,166 b/d, respectively. However, EIA expects productivity in the Anadarko Region to continue to increase in the near future as operators complete more wells.

Drilling activity in the region has been increasing over the past year, as the rig count in the DPR region has increased from 84 in January to 129 in July. Anadarko's rate of increase is second only to that in the Permian Region in 2017.

EIA said the maturity of the oil industry in the region and its proximity to the trading and distribution hub in Cushing, Oklahoma, should allow producers to increase output using existing takeaway capacity. The relatively low transportation costs from the wellhead to Cushing may provide higher profits, allowing producers to continue operating in a relatively low-price environment. Trade press also indicates that several planned and recently completed pipelines are expanding takeaway capacity in the region.

According to EIA’s DPR, oil production increased in the Anadarko Region by 112,000 b/d from July 2013 to July 2017, hitting a peak of 498,000 b/d in March of 2015. The Anadarko Region is expected to contribute to U.S. production growth, given anticipated market conditions over the next 16 months. EIA forecasts production in the Anadarko Region to grow to 500,000 b/d by the end of 2018. The West Texas Intermediate crude oil spot price is forecast to increase from $47 per barrel to $53 per barrel over the same period.