...Rigs Down, Production Resilient: The U.S. onshore Lower 48 rig count dropped nearly 55%, ending at 821, during first-half 2015. However, July 2015 rig counts remained relatively flat, suggesting some stabilization and possibly a trough. Production was resilient despite the sharp reduction in rig counts, mainly due to uncompleted wells coming online and increased new well production per rig offset by relatively higher tight oil and shale gas legacy well decline rates. Possible 7% Second-Half Production Decline: Extrapolating from U.S. Energy Information Administration (EIA) data, Fitch Ratings estimates that at June operating and activity levels, the production rate in tight oil and shale gas regions (about 50% of total U.S. oil and gas production) will exit 2015 roughly 7% below the 13.1 million barrels of oil equivalent/day (mmboepd) rate from June. This exit production rate would be around 3% lower than year-end 2014. Tight Oil Outpaces Gas: Fitch forecasts that at June operating and...
