This interactive presentation contains the latest oil & gas production data from all 45,039 horizontal wells in the Permian (Texas & New Mexico) that started producing from 2001 onward, through July 2023.
Permian tight oil production came in at 5.3 million b/d in July (after upcoming revisions, horizontal wells only), good for 60% of total US tight oil output. The reason why the chart above shows a 1-2% lower volume in July, is that as always there are a number of recently completed & producing wells that have not yet been reported by the agencies involved. Natural gas production showed a major decline to just above 20 Bcf/d in July, but preliminary data has this back up to 21 Bcf/d in August, the same level as in May.
In the first 7 months of this year, 3,232 new horizontal wells came online, vs. 3,352 in the same period a year ago, an almost 4% drop.
Drilling activity in the Permian Basin has fallen by just over 15% since the end of April, but has steadied since October at a level of around 300 horizontal rigs (source: Baker Hughes):
The number of active rigs as of last week (299) is sufficient to continue to grow output in the basin, if one assumes no changes in rig count and rig & well productivity (an unrealistic, but interesting base case). In such a scenario, production could grow to 6 million b/d by the start of 2026:
However, this does not take into account that the decline in well productivity, which we have long reported on, has not yet reversed (although the underlying Supply Projection dashboard does offer the capability to adjust for that). This decline can be viewed in the “Well quality” tab in the above interactive presentation, but also in the below overview, in which one can see the average cumulative oil production in the first 9 months, for each of the major subbasins, on a normalized basis (divided by lateral length):
The 800 horizontal wells that came online in the Delaware in the last quarter of 2022 recovered on average 180 thousand barrels of oil over the first 9 months of production, for every 10k feet of lateral length. This was 13% lower than what the 543 wells managed that began production in Q3 2021, 5 quarters earlier (207k bbl per 10k feet), although during that time with low oil prices also high-grading took place. Wells are frac’ed at every higher proppant intensities, with a ratio of 2,200 pounds of proppants for each lateral feet being the norm in recent quarters.
An operator that has suffered from even higher well productivity declines is Pioneer Natural Resources, the largest tight oil producer in the Permian Basin, and the target in a recent acquisition announcement by Exxon Mobil. Pioneer’s well productivity, measured by the same metric as above, has fallen by 20% during the 3 years since 2019 (see the top-right chart):
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.
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.
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 changes 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.