EIA uses two differing methods to determine production from major and minor oil and natural gas plays onshore in the United States. One method takes a geographic approach, focusing on surface-level analysis, and the other method uses a geologic approach, focusing on formation-level details. The differences between these two approaches can provide information on potentially emerging plays.
EIA’s Drilling Productivity Report (DPR) examines surface activity to analyze production. Production from counties overlying major producing regions, as well as pipeline flow and drilling rig movement, are used to estimate total production. The DPR is focused on analyzing the relationships between drilling efficiency in a region—such as production volumes compared to rig counts—and the oil and natural gas production from that region.
The DPR’s focus on surface activity means that these production volumes do not distinguish between the specific geologic formations into which individual rigs are drilling. Formations can overlap each other like layers of a cake. For instance, production in the Permian Basin region of Texas shows production from the Spraberry, Wolfcamp, Bone Spring, Delaware, Glorieta, and Yeso formations, reflecting various drilling depths associated with each formation within the basin.
EIA also tracks production from specific formations. Using geologic formation information from producing wells, this approach reveals exactly which plays or formations are associated with the production. Once a well is completed, operators in most states report the formation or reservoir to their respective state agencies, as this information may not be known (or disclosed) before drilling or completing a well.
When results from these methods are combined, the geologically derived production volume per play or formation is compared to the geographically derived production level. Because the DPR regions include all counties overlying the producing formations, the geologically derived production level is always less than the geographically derived production level. If the difference between the two remains constant or decreases, it implies that EIA is capturing the important sources of production in the region.
However, if the difference between the two increases, this indicates production activity that is emerging and is not yet identified. In these cases, further analysis is done to identify the source of the increasing production. For example, the gap between production estimates for the Niobrara-Codell formation and Niobrara-Codell region has been growing. This led EIA to analyze the region further, and it was determined that the emerging production was from formations in the Powder River Basin. Formations in this region—the Frontier, Parkman, Shannon, Sussex, and Turner—have recent production increases because of the application of advanced completion techniques, specifically horizontal drilling and hydraulic fracturing.