This is an older blog post, you will find one on more recent data here
These interactive presentations contain the latest oil & gas production data from all 21,384 horizontal wells in the Permian (Texas & New Mexico) that started producing from 2008/2009 onward, through March 2019.
Oil production from horizontal wells in the Permian set another record in March, at over 3.2 million bo/d, even before upward revisions. As the blue areas indicate, in March more than 2/3rd of total production came from wells that began production since 2018. Gas production also set a new record at close to 11 Bcf/d (switch “Product” to gas), although not all of it is wanted due to sometimes negative pricing.
As the “Well quality” tab reveals, initial performance has increased since 2016, but nowhere near the gains seen in the 2013-2016 time frame. This also doesn’t take into account that laterals kept increasing, as did proppant loadings.
The biggest change was in the number of well completions; in 2018, on average more than 400 horizontal wells came online each month, versus less than 200 in 2016.
The final dashboard, “Top operators”, displays the production history of the 5 largest operators. They all set new output records in 2019.
The ‘Advanced Insights’ presentation is displayed below:
This “Ultimate recovery” overview shows the average production rate for these wells, plotted against their cumulative recovery. Wells are grouped by the year in which production started.
The 2,254 horizontal wells that started production in 2016 have so far recovered the most oil, on average: 200 thousand barrels of oil. They are still producing at an average rate just north of 100 bo/d, and they may recover another 200 thousand barrels before they are down to 20 bo/d (extrapolate the curve to arrive at roughly this number).
The following screenshot (from our advanced analytics service) shows how initial well productivity has evolved in the 6 top-producing counties in the Permian.
Click on the image to see a high-res version of it. The graph shows the average oil recovery in the first year on production, by county and production start date. Increases in lateral length and proppant use greatly boosted initial productivity in the past 6 years. The best well performance is now seen in Midland and Lea. Interestingly, performance dropped somewhat in Reeves County in the last year.
The WSJ recently published 2 articles about the Permian, for which they also found use in our analytics service (behind paywall):
- A Leader of America’s Fracking Boom Has Second Thoughts (last week)
- A Fracking Experiment Fails to Pump as Predicted (today)
Later this month, we will be at the URTeC in Denver, from July 22nd until the 24th. Drop by our booth, #951, if you are in the area, for a chat and a personalized demo!
Early next week we will have a post on the Eagle Ford, followed by an update on all covered states in the US.
Production data is 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 proration 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 individual 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 a 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.
While there still might be some upward revisions for Permian oil production in March, we can clearly see a much different trend JAN-MAR 2019 than the same period in 2017 & 2018.
Permian oil production increased during the following periods:
JAN-MAR 2017 = +160,000 bd
JAN-MAR 2018 = +333,000 bd
JAN-MAR 2019 = +11,000 bd
Could the revisions change the figures for JAN-MAR 2019 all that much? It seems as if we have a much different trend in 2019 in the Permian, as well as in the Bakken. Production seems to be leveling off.
It is quite common for especially Texas that production in recent months is revised upwards, as production from new wells is typically available with some lag time.
As well productivity seems to be somewhat predictable, the biggest uncertainty is in how many wells will be completed this year. The horizontal rig count is now ~10% lower than a year before. If the completion count is 10% lower as well, the Permian still has room to grow over time to over 4 million bo/d, with current well productivity. But not with the speed that we saw last year.
Thanks for your reply, and indeed, you are likely correct that production will be revised higher. So, it will be interesting to see how Permian production will turn out to be when the revisions come in.
However, I had one question that you might be able to shed some light. I believe there might be some “Overstating” of production by one or more shale oil companies if we look at the quarter to quarter change. Maybe I am full of beans here, but if we look at Pioneer’s results for Q3 & Q4 2017, we see a huge increase in Permian oil production with not that much of an increase in well count or Capex.
According to Pioneer’s Investor Presentations, we had the following for those quarters:
Q2 2017: Oil Production: 110,028 bd, $641 million CAPEX, net new wells = 61
Q3 2017: Oil Production: 126,771 bd, $629 million CAPEX, net new wells = 61
Q4 2017: Oil Production: 140,261 bd, $662 million CAPEX, net new wells = 64
Q1 2018: Oil Production: 144,628 bd, $818 million CAPEX, net new wells = 63
Q2 2018: Oil Production: 151,083 bd, $770 million CAPEX, net new wells = 67
So, how did Pioneer increase Permian horizontal oil production by 30,233 bd in two quarters (Q3-Q4 2017) by spending $1.3 billion on CAPEX with 125 net new wells, but could only increase production the next two quarters (Q1-Q2 2018) by 10,822 bd (only a third of the previous two quarters) with spending $1.6 billion and 130 net new wells???
Maybe there is a perfectly reasonable answer for this huge spike in production Q3-Q4 2017, but the math doesn’t add up. I have seen this in several companies.
Hello! It appears that you have completely revised total gas production data and the number of wells from previous years (2008-2018). Am I correct? If so, why does historical data get revised? How far into history can the revisions be made? Thank you for your answer. Vitaliy.
Normally there are some upward revisions for esp. the Texas basins each month, for the past ~6 months. This time the revision is larger, as we are now able in some special cases to get preliminary production data for certain wells that are only partially reported.
Therefore, future revisions will now be slightly less than before.
I looked at monthly data for PADD3. The production from November to April were 7.8 MBD, 7.82 MBD, 7.75 MBD, 7.66 MBD, 7.85 MBD and in April 8.03 MBD.
Yes production went into a stall mode from November 2018 to March 2019.
Recovery from wells for RAB Davidson Pad — 2016 (15 wells), 2017 (18 wells).
Doesn’t look so good for the cube.
Must have not attached PNG
Wow, that is some serious capital destruction… That would have cost over a quarter of a billion dollars, doubt they will earn half of that back. But at least they got some investor relations mileage out of it.
Was thinking maybe gas production was the missing link for 300k bbl BOE recoverable, but I guess not.
Interesting… the different production rates by year for gas? Wonder if they depleted most of the gas drive they had when producing the parent wells.
The WSJ is quite generous with an average EUR of 300 thousand bbl.
There are reports that Karroys analytics has information that completions in the permian have been under reported by around 20 percent in 2018. I know that you do your best to accurately report production, but with production reported by lease instead of well in Texas, that’s probably difficult to determine in some cases. Have you looked at the Karroys info, and does it effect your reports.
Link to article in Oil and Gas Jrnl