Understanding U.S. Oil and Gas Production Benchmarks

Fortunes in the oil and gas space can turn on a dime, and this year has been a dramatic illustration of this with production falling by over 20% in a matter of months. Understanding current market dynamics requires understanding the ins and outs of data that is available, and here we focus on historical production data. A key industry benchmark for U.S. oil and gas production is the U.S. Energy Information Administration's (EIA's) EIA-914 report, which publishes aggregate oil and gas production by state at the end of each month.

Filling the Reporting Gap 

Recent monthly production numbers in the EIA-914 report are estimated from survey data collected directly from a sample of oil and gas producers, which account for about 90% of production in the Lower 48 states. The EIA then releases "final" monthly values for the previous year each fall. Since there is a several-month gap in the EIA report, BTU Analytics fills the gap by analyzing other data sets in tandems such as daily gas flow samples, rig counts, and well counts, and estimates present-day production as illustrated in the figure below. This outlook is published in our flagship Upstream Outlook report along with five-year forecasts. 

EIA-914 data provides an aggregate state-level benchmark, but producing states also individually publish production data at a more granular well or lease level. This enables greater insight to be gleaned into production trends at a play level, as well as trends in specific well performance and type curves. BTU collects, cleans, standardizes, and allocates production from a lease to a well level when necessary for certain states, and leverages this state-level data in our own internal analysis. BTU State Level Production is now available for clients.  

The Timeliness of State Data Varies 

However, the timeliness of state-specific production data varies across states, and in many cases is even more lagged than what is seen from the EIA. An example is Texas, where BTU collects production data from the Texas Railroad Commission, which reports data at a lease level where a complete sample is lagged by over a year, and "pending" data that brings the total production sample more current. However, the Texas production sample versus the EIA starts to fall off in April, as illustrated below. 

To focus on transparency and give an understanding of how "complete" each state production data sample is relative to the EIA benchmark, BTU State Level Production data available through the BTU View includes a link that explicitly provides a visualization of the relative completeness for each state versus EIA, as illustrated below. Most state’s production samples fall off the EIA by a few months, though there are states that are even more lagged, such as Oklahoma, and Ohio, which only report production data quarterly. 

Conclusion 

Understanding the details of the underlying oil and gas production data used in the analysis is critical to make informed calls and know where the risks and pitfalls lie. For access to state-level production data that we use every day in our own analysis with a focus on transparency, check out BTU State Level Production data. 

This article was originally published on the BTU Analytics website.  

This blog post is for informational purposes only. The information contained in this blog post is not legal, tax, or investment advice. FactSet does not endorse or recommend any investments and assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained in this article.