Which US States Produce the Most Shale Oil?

The Motley Foll

By Matthew DiLallo

Mar 25, 2017

While fracking unlocked an unimaginable supply of shale gas and oil, the boom in oil wells is heavily concentrated in just four U.S. states.

Believe it or not, America has been fracking oil wells since right around the time of the Civil War. That said, modern oil well fracking didn't start taking shape until the 1940s, and it wasn't until the 1990s when it was combined with horizontal drilling to unleash the shale gas boom. The industry eventually transferred those two techniques into oil drilling when Continental Resources (NYSE:CLR) drilled the first commercially successful well in the North Dakota Bakken.

The industry has since taken that combo to other U.S. states, enabling the country to unlock a treasure trove of shale oil resources. That said, according to the U.S. Energy Information Administration, seven regions accounted for 92% of the country's shale oil growth in recent years:

Shale Region	Shale Oil Production	States
Permian Basin	2,286,000 bpd	Mostly Texas, though some production comes from New Mexico
Eagle Ford Shale	1,144,000 bpd	Texas
Bakken Shale	964,000 bpd	Mostly North Dakota, though some production comes from Montana
Niobrara Shale	444,000 bpd	Colorado and Wyoming
Haynesville Shale	43,000 bpd	Louisiana and Texas
Utica Shale	43,000 bpd	Pennsylvania, West Virginia, and Ohio
Marcellus Shale	38,000 bpd	Pennsylvania, West Virginia, and Ohio

Meanwhile, the bulk of the country's shale oil production comes from just four states: Texas, North Dakota, Colorado, and Wyoming.

Deep in the heart of Texas

The Lone Star state has not one but two premier shale oil plays: The Permian Basin and Eagle Ford Shale. In many ways, the Permian Basin is the gift that keeps on giving. The legacy oil basin has already delivered nearly 29 billion barrels of oil since it first started producing in 1921 and currently accounts for 14% of the country's total production. However, its best days appear to lie ahead thanks to the discovery of several stacked shale plays in the region. One of the leading drillers in the basin, Pioneer Natural Resources (NYSE:PXD), believes that oil production in the Permian could grow from around 2 million barrels per day to as much as 5 million barrels per day over the next decade. Pioneer expects to be one of the drivers of that growth, with the company projecting that its oil output will grow from an average of about 133,000 bpd last year up to 700,000 bpd by 2026 as part of its 10-year growth plan.

Lost in all hoopla surrounding the Permian is the incredible emergence of the Eagle Ford Shale over the past several years. While the Permian has been around for nearly a century, drillers didn't even discover the Eagle Ford until 2008. However, thanks to investments by EOG Resources (NYSE:EOG) and other large drillers, it has grown into one of the top-producing oil fields in the world. That said, there is still plenty of oil in the ground, with EOG Resources estimating that its acreage position alone holds 3.2 billion barrels of oil equivalent (BBOE) resources. While that's about half the 6 BBOE resource EOG has in the Permian, the Eagle Ford will continue to be a major growth driver for the industry and the state of Texas….

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