by Steve St. Angelo, SRSRocco Report:

As dark clouds gather on the financial horizon, big trouble is brewing in the U.S. Shale Oil Industry.  While most Americans are focused on the Mainstream media’s coverage of the ongoing Washington D.C. circus, the real threat to the domestic economy lies in the country’s oil heartland.  And, if we look at what is taking place in the United States’ largest shale oil region, the signs are troubling.

The Permian Oil Basin in Texas and New Mexico accounts for nearly half (46%) of the total U.S. shale oil production.   According to the data from Shaleprofile.com, Permian’s oil production peaked in May at 3.43 million barrels per day.  Due to the massive decline rate, production in the Permian has stalled this year.

The chart below shows the Permian oil production declining even though more wells continue to be brought online.  Unfortunately, there aren’t enough wells being added to offset the tremendous decline rate.  You will notice how quickly the oil production that was added in 2018 (Light Blue color) has declined in just half a year:

To give you a better idea of the huge decline rate in Permian oil production, let’s only focus on 2018 and 2019 in the following charts.  But, before doing so, I wanted to let everyone know that this information would not be possible without the data from Shaleprofile.com.  I highly recommend that you check out Shaleprofile.com and consider subscribing to the service if you want to be able to access more details in the shale industry.  It’s worth its weight in gold.

Let’s look at the Permian oil production just for 2018.  Permian oil production for 2018 peaked in December at 2,136,000 bopd or 2,136K bopd, and declined to 1,056K by July 2019. That is a STUNNING 50.5% decline in just seven months:

The next chart shows the Permian oil production that was brought online from Jan-July 2019 increased to 1,308K bopd, or 1.3 million barrels per day:

Unfortunately, the 2,493 wells completed so far in 2019 haven’t been enough to show much overall oil production growth in the Permian.  If we combine both 2018 and 2019, here is the result:

Even though the companies drilling and completing wells in the Permian added 2,493 new wells so far in 2019, overall production from these two years only increased by a net 221K bopd (221,000 bopd).  Thus, of the 1,308K bopd of the new output brought on in 2019, 1,087K bopd was already lost due to the massive decline rate of 2018’s production.

Now, there may be some upward revisions for Permian oil production in 2019 because a small percentage of the wells have not yet been reported.  But, this will not change the overall situation all that much.

Just think about this for a minute. Of the 5,132 wells drilled, completed and brought online in 2018, 50.5% of that production has VAPORIZED in just seven months.  This is CAPITAL DESTRUCTION at its finest.

Read More @ SRSRoccoReport.com