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 112,550 horizontal wells in 12 US states, through April 2019. Cumulative oil and gas production from these wells reached 11.3 billion bbl and 129.5 Tcf of natural gas. West Virginia and Ohio are deselected in most dashboards, as they have a greater reporting lag. Oklahoma is for now only available in our subscription services.
In the comments section at the bottom of this post, I will comment on some recent articles that questioned whether well productivity is stalling in the Permian.
Oil production from horizontal wells in these states grew to close to 7 million bo/d in April (after upcoming revisions), setting a new record. That would represent a y-o-y growth of 1.3 million bo/d, but the rate at which production is increasing has slowed down since the end of last year.
In the “Well quality” tab, the production profiles of all the horizontal wells in the major tight oil basins are selected. After many years of major improvements in well productivity, there appears to be a slow-down in the last 2 years. Still, the wells that began production last year are on track to recover 132 thousand barrels of oil in the first year on production, on average, which is 9 thousand barrels of oil more than the 2017 vintage.
The final tab lists the top 5 operators in these tight basins. EOG is still comfortably in the lead with over 600,000 bo/d of production in April.
The “Advanced Insights” presentation is displayed below:
This “Ultimate recovery” overview shows the relationship between production rates and cumulative production over time. The oil basins are preselected and the wells are grouped by the year in which production started.
Also here you can see that well productivity increased significantly over the years, and is still going up, although the rate of growth is going down. But what if you normalize for the lateral length, which has increased in almost all of the basins?
The following screenshot shows what that looks like. It was created in our ShaleProfile Analytics service (Professional), which is available for just $279/month.
Here you can also find these “Ultimate recovery profiles”, with almost 60,000 horizontal oil wells selected in all the major tight oil basins. It reveals that based on this normalized metric and depending on exactly where and how you measure, well performance barely increased in the 2016-2018 time frame. Here below in the comments section we will do a similar exercise for the Permian.
Early next week we will have a new post on North Dakota, which will soon release June production data.
Production data is subject to revisions. For these presentations, I used data gathered from the sources listed below.
- Arkansas Oil & Gas Commission
- Colorado Oil & Gas Conservation Commission
- Louisiana Department of Natural Resources. Similar to Texas, lease/unit production is allocated over wells in order to estimate their individual production histories.
- Montana Board of Oil and Gas
- New Mexico Oil Conservation Commission
- North Dakota Department of Natural Resources
- Ohio Department of Natural Resources
- Pennsylvania Department of Environmental Protection
- Texas Railroad Commission. Individual well production is estimated through the allocation of lease production data over the wells in a lease, and from pending lease production data.
- Utah Division of Oil, Gas and Mining
- Automated Geographic Reference Center of Utah.
- West Virginia Department of Environmental Protection
- West Virginia Geological & Economic Survey
- Wyoming Oil & Gas Conservation Commission
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.
There have been several articles recently about whether or not well productivity in the Permian is deteriorating, among which:
1. “Fitch says signs have emerged of diminishing well productivity” :
Fitch: US shale oil output growth slowing
2. “We conclude that the average new production per well in the basin matches the all-time highs seen in early 2019—despite depletion concerns.” : Rystad Says Permian Well Productivity is Just Fine
3. “Gilmer’s and DrillingInfo’s findings on this question are also supported by the findings of another recent report, from Rystad Energy, which also finds per-well recoveries in the Permian continuing to grow during 2019” : Here’s What Is Really Happening In The Permian Basin
So what is our take, you are asking.
First, which metric should we be using. I am typically in favor of measuring only the oil recovery in the tight oil basins, as the gas portion doesn’t bring much operating profit (if any).
Regarding the time frame, I prefer long horizons, like 1-5 years. Unfortunately, that does give us much less recent data to work with. Rystad in their analysis only considers the peak month, which I find too short. With our “Ultimate recovery profiles”, we include all available data, and at least 4 months of data for the 2018 vintage.
So, how is Permian well productivity evolving?
(1/3). Not normalized for lateral length, well productivity has kept increasing in the Permian, as you can see here (only horizontal oil wells are selected).
(2/3). Once you normalize for the lateral length, average well productivity has barely changed between 2016 and 2018
(3/3) You can see a similar picture for only the New Mexico part of the Permian, for which we have more recent data to work with (6 months for the 2018 vintage), and which doesn’t have any potential issues with allocations, as production is reported on well level:
To conclude: We are not claiming that well productivity in the Permian has peaked (too early for that). It could go further up from here. But it is still significant that, on a normalized basis, well productivity did not notably change between 2016 and 2018, after several years of major improvements.
Enno, I get lost with cumulative gas production “129.5 million Bcf.”
I think it should be:
129.5 trillion cubic feet or:
129.5 billion Mcf or:
129.5 million MMcf or:
129.5 thousand Bcf
You are completely right, thank you for the correction, it is updated now!
Thank you for allowing the public to access this important data! Enno, do you have an opinion as to the validity of Kayrros’ recently released report on well completions/DUCs in the Permian?
Thank you LEL,
I talked briefly about the Kayrros’ report in the final section of this post