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 116,815 horizontal wells in 12 US states, through August 2019. Cumulative oil and gas production from these wells reached 12.2 billion bbl and 137 Tcf of natural gas. Ohio and West Virginia are deselected in most dashboards, as their production data is less current. Oklahoma is for now only available in our subscription services.
Although the horizontal rig count has fallen by 26% since the start of this year (from 941 to 695 last week), oil output in August from horizontal wells still climbed to over 7.1 million bo/d. In the graph above you can find that the contribution from wells that began production since 2018 was just over 2/3rd of the total in August. This is a very similar finding as Bloomberg made in this article yesterday: Faded Texas Oil Field Offers Austerity Lesson for U.S. Shale.
The production profiles for all these horizontal wells can be viewed in the “Well quality” tab, where the major tight oil basins are preselected. The rate of improvement in well productivity has steadily slowed since 2016. After selecting only oil wells and normalizing for the increase in lateral length (possible only in our ShaleProfile Analytics service), we see no improvements in initial well results in the past 3 years, on average.
For some operators we even find a clear deterioration in average well performance, such as EOG. It is still clearly the leader in US shale though, as is visualized in the final tab (“Top operators”).
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.
Early next week we will have a new post on North Dakota, which set a new production record in October (data for this month is already available in our subscription services).
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.
Stripper well operators know that real cash flow can be made over years of efficiently operating low volume wells. At least this is the case when it comes to USA lower 48 on shore. Oil price is the big variable. Leases are selling for 1/4 to 1/3 of what they were in 2013 in our conventional USA lower 48 neighborhood. It appears similar regarding shale. PV10 still matters, and with stripper wells, the oil price plugged in makes all the difference.
In the end, the EOG’s of the world are and will be stripper well operators. I suspect a lot of the corporate overhead needed to lease and drill large numbers of wells will be eliminated assuming these companies finally go into the mode of trying to generate positive cash flow.
I wonder if EOG is still classified as a growth stock with regard to its common shares?
I hope the corner has been turned and the reserve auditors see the promise of 700 MSTBO wells ended up in a blind alley. These companies need to mark to market.
Everyone in this business is tired and broke. Salvation rests hidden with the truth.