U.S. shale oil output growth is slowing and nowhere is this more evident than in the Permian Basin, where growth will be under 1 percent in August according to the Energy Information Administration (EIA). The EIA estimated July Permian production reaching 4.23 MMbbl/d (millions of barrels of oil per day), an increase of 55,000 b/d (barrels per day) on June. In contrast in July, the EIA revised production downwards to 4.17MMbbl/d, forecasting growth of just 34,000 b/d by the end of August.
Now many companies, ranging from EOG Resources Inc. to smaller players such as Laredo Petroleum Inc., are dropping their 2019 growth forecasts. Producers in various North American oil-rich shale basins are dialling back growth plans in the face of a growing number of complex problems which are killing returns and discouraging investors. The biggest and constant constraint on attracting new money and rewarding investors is the high rate of shale well depletion — as much as 70 percent in the first year — which forces companies to keep spending on new wells just to maintain output.