The recent boom in shale oil and gas production in the US has dramatically improved the economic and energy security prospects on North America. Texas alone saw a 20% increase of its oil production in 2013, which was a record year for the US in terms of oil and gas production growth. However, recent claims have been made that Texas’ production is about to slow down. Economist Karr Inghamv made a presentation at the Houston Petroleum Club on the 29th of January arguing that production would fall due to, among other things, a decrease in rig counts. 
Others disagree. The Drilling Productivity Report released by the US Energy Information Agency three months ago argues that new well productivity in the US would stem from higher drilling efficiency, despite the decrease in the rig count. But while productivity improvements are part of the information explaining past trends, they don’t tell us very much about where total production is going. 
So, if the count of drilling rigs isn’t the silver bullet for estimates of future oil and gas production, what is? The EIA already seeks for trends in production and depletion through the use of additional metrics, such as: drilling efficiency, well productivity, and field depletion. Other parties refer to oil field service job growth or interest rates. However, none has emerged as the ‘new’ industry standard for understanding future production trends.
Without understanding the key drivers of future shale oil and gas production, the US lacks visibility on the longevity of the shale boom and its economic benefits. Rig counts and rig efficiency are not wholly satisfactory leading indicators, so what is?
- Growth in the number of new wells?
- Local Industry Employment?
- Capital investments?
- Real Interest Rates?
DISCUSSION: What data available to us today gives us the best estimate of shale oil and gas production over the next 3-5 years…