Enno Peters
This is an older blog post, you will find one on more recent data here
This interactive presentation contains the latest oil & gas production data from all 38,199 horizontal wells in the Permian (Texas & New Mexico) that started producing from 2007/2008 onward, through August.
Total Production
Permian tight oil production was flat in August, at around 4.6 million b/d (after upcoming revisions, horizontal wells only). Not all this production is reported yet by the state agencies, thus the apparent drop in production in the above chart. Natural gas production was almost unchanged (after revisions), at just above 18 Bcf/d. You can view this by toggling the ‘Product’ selection to gas. Slightly more horizontal wells were completed in the first 8 months of this year in the Permian Basin (3263) compared with last year during the same time frame (3100).
Production sharing
Novi labs has entered production sharing agreements with several parties, which have accurate well-level production data (e.g. operators and mineral owners). Especially for Texas, where production data is provided by lease, and not by well, this makes a major difference in production data quality. For the Midland basin for example, more than 2,500 horizontal wells are in this dataset, together good for over 25% of recent tight oil production (and for Texas overall, 12% of recent tight oil production):
We continue to work with other parties in the coming weeks and months to increase participation in this program. Together with our best-in-class lease allocation, our production data for states like Texas is now at a very level of accuracy.
Drilling Activity
Drilling activity increased to the highest level in 2.5 years in recent weeks, to 335 horizontal oil rigs, as can be viewed in the following chart:
More than half (189 rigs) are active in the Delaware Basin. But we probably have not yet seen the impact of the recent drop in oil prices.
Well productivity
Well productivity has increased significantly in the Permian Basin over the past decade, with lateral lengths almost doubling during this period. After normalizing well production by lateral length, we find that well results have stagnated in recent years, in both the main subbasins:
The top chart reveals that well productivity, as measured by the cumulative oil recovered during the first year of production for every 10k feet of lateral length, appears to have plateaued since 2016. The bottom 2 charts show the increase in lateral lengths and proppant loadings during the same time frame.
We show in the following overview, which uses the same dashboard, these results for Pioneer Natural Resources, which is the largest shale operator in the Permian Basin, with close to half a million b/d of production:
As you can see in the top right chart, it’s normalized well results seem to have dropped since the end of 2018 (when it was using the highest proppant volumes per well), despite a small increase in average lateral length (see 2nd chart on the right side).
Productivity Ranking
In the following overview we can see a ranking of all the major shale operators in the Permian Basin, based on the same well performance metric as used above:
The chart on the right-hand side reveals the ranking of these operators, based on the average cumulative oil recovered in the first year, for every 10k feet of lateral length. Only horizontal wells that have begun production since 2016 are included, and only operators that completed at least 500 horizontal wells during this period. The map shows all the wells included, and are colored by the same performance metric. EOG scores the best results; its 1,400 horizontal wells recovered on average 283 thousand barrels of oil during the first year, for every 10k feet of lateral length. All the top 6 operators almost exclusively focus on the Delaware Basin.
Top operators
In the final tab (“Top operators”) the production and well positions are displayed for the 15 largest producers in the Permian. Endeavor Energy, the number 8 on this list, has doubled it production in less than 2 years.
Finally
Production and completion data are subject to revisions.
Note that a significant portion of production in the Permian comes from vertical wells and/or wells that started production before 2008, which are excluded from these presentations.
Sources
For these presentations, I used data gathered from the following sources:
- Texas RRC. Oil production is estimated for individual wells, based on a number of sources, such as lease & pending production data, well completion & inactivity reports, regular well tests, and oil production data.
- OCD in New Mexico. Individual well production data is provided.
- FracFocus.org
Brief manual
The above presentations have many interactive features:
- You can click through the blocks on the top to see the slides.
- Each slide has filters that can be set, e.g. to select individuals or groups of operators. You can first click “all” to deselect all items. You have to click the “apply” button at the bottom to enforce the changes. After that, click anywhere on the presentation.
- Tooltips are shown by just hovering the mouse over parts of the presentation.
- You can move the map around and zoom in/out.
- By clicking on the legend you can highlight selected items.
- Note that filters have to be set for each tab separately.
- The operator who currently owns the well is designated by “operator (current)”. The operator who operated a well in the past month is designated by “operator (actual)”. This distinction is useful when the ownership of a well changed over time.
- If you have any questions on how to use the interactivity, or how to analyze specific questions, please don’t hesitate to ask.
News, trends and data for the US upstream industry
Novi Energy Newsletter
9 Comments
Hi Enno,
That is excellent tht you are able to get data from operators in the Permian. If you compare the 36 month cumulative from your algorithm for the average well (where the algorithm allocates output from leases to individual wells) cumulative at 36 months with the data from operators for that same group of wells what kind of error do you find for your algorithm?
This information probably cannot be shared, but would be interesting as it would give us an idea of the accuracy of the estimates for average well profile data.
You suggest this data confirms the accuracy of your overall estimates, maybe within 1% or so?
Hi Dennis,
We have not done this exact calculation, but over this year our allocation errors have gone down significantly (we have actuals for about 10k Hz wells, so this helped enormously with finetuning our allocation). We can now confidently say that our production data is the best in the market. But most of this is especially relevant when looking at smaller groups of wells or individual wells. The reason is that our allocation algorithm already allocated all lease production over all wells each month in the past. Therefore, our profiles for the average wells haven’t changed much, and your probably in the right ballpark regarding the accuracy.
Hi Enno,
When I pull up spud and first flow numbers from Jan 2007 to Feb 2022 and calculated DUCs using DUC is this month’s DUC count is last month’s DUC plus spuds minus first flow, I get a different result from your DUC count, for Feb 2022 I get 2412 DUCs, but your data shows 2980 DUCs for Feb 2022 a fairly large discrepency. What explains this difference?
Thanks.
Hi Dennis,
In that period, how many Hz wells were spud and had first flow with the data you have?
Hi Enno,
From Jan 2007 to Feb 2022 (inclusive) I have 38186 total wells spud and 35774 total first flow wells. Using the data from the Aug 2022 Permian update.
Hi Dennis,
Sorry for the late response. Can you explain how you got these numbers (38186 & 35774)?
We know that in TX well completion reports are often provided with significant lag time, so that we only know several months after the fact that a new well has been drilled. This explains why the DUC count in the last period (even up to a year) is undercounted. We are working on finding ways to complete that count.
Hi Enno,
I added up the reported first flow wells and spud wells from the Dec 2, 2022 Permian report from Jan 2007 to Feb 2022.
Using most recent update for Permian, I have 38772 total horizontal wells spud and 35940 total wells with first flow for all months from Jan 2007 to February 2022, the difference is 2832 wells that would have been drilled but are not yet flowing, DUC count from the chart on Feb 2022 is 3271, significantly different from 2832 (439 extra DUCs). We could use Jan 2022 (DUC count on chart is 3232) rather than Feb 2022, and we have 38365 wells spud and 35524 first flow wells suggesting DUCs should be 2841 in Jan 2022. A significant difference of 391 DUCs remains.
Reread comment and it was unclear, sorry.
DUCcountcurrent=DUCcount last month plus spuds current month minus first flow wells current month