Understanding US 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 today we will focus on historical production data. A key industry benchmark for US oil and gas production is the EIA 914 report, which publishes aggregate oil and gas production by state at the end of each month. Data in the report is lagged by a few months; the most recent report published on August 31 contained data for the month of June. Recent monthly production numbers in the report are estimated from survey data collected directly from a sample of oil and gas producers, which account for about 90% of production in 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 tandem 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, 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. 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 reports production data quarterly.

Understanding the details of the underlying 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.

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Marissa Anderson is the Manager of Data Analytics at BTU Analytics, LLC. She has diverse experience in the energy industry including fundamental analysis, investor relations and engineering. Prior to joining BTU Analytics, Marissa was a Senior Investor Relations Analyst with MarkWest Energy Partners, L.P., and a Senior Energy Analyst with Bentek Energy where she focused on the Natural Gas Liquids market. Marissa holds a B.S. in Chemical Engineering from the Colorado School of Mines, an M.S. in Global Energy Management from the University of Colorado Denver, and is a licensed professional engineer in the state of Colorado.

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