Horizontally drilled wells have driven U.S. oil and gas production to record levels, but federal analysts say their steep decline rates mean companies must keep drilling wells to sustain or increase output.
In a new report Wednesday, the U.S. Energy Information Administration said “the volume of production declines from existing wells” has climbed along with the nation’s oil and natural gas production.
“Because production from oil and natural gas wells declines over time as reservoir pressure decreases, new wells are required to maintain the same production level,” EIA said in thereport.
The findings show the demands facing the oil and gas sector as the Trump administration continues to push its energy dominance agenda amid a backdrop of relatively weak crude prices and rising costs for materials used in the oil field. Industry executives have anonymously voiced concerns over oil prices in the Federal Reserve Bank of Dallas’ quarterly surveys.
