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Permian – update through October 2020

These interactive presentations contain the latest oil & gas production data from all 28,999 horizontal wells in the Permian (Texas & New Mexico) that started producing from 2008/2009 onward, through October.

Permian-15243-2.png

Visit ShaleProfile blog to explore the full interactive dashboard

Total Production

Permian tight oil production fell in October by 1% m-o-m to below 3.7 million bo/d (after upcoming revisions). Over 1/3rd fewer wells were completed in the first 10 months of 2020 (~2,800), compared with the same period in 2019 (4,568). Gas production has held up at nearly 15 Bcf/d.

Supply Projection

As of last week, 171 rigs are drilling horizontal wells in the basin (source Baker Hughes), up from 123 in September. With the recent increases in drilling activity, our outlook for the basin has further improved:

Permian-Supply-Projection.png

Tight oil outlook in the Permian, by state, based on current drilling activity & productivity

We estimate that these rigs, given current rig & well productivity, could maintain a production level slightly below where it was in October, at around 3.4 million bo/d. As you can see in the image above, New Mexico has received a relative larger portion of the activity, which will fuel further growth in that area.

Permit Activity

We’ve recently started to track permit activity in the major basins in a new dashboard, and just added Louisiana and West Virginia to our coverage (6 states are now included and more will be added this month). From this dashboard, available in ShaleProfile Analytics (Professional), you can also see that almost half of the permits for new horizontal wells recently approved are on the New Mexico side of the basin:

Well-permits.png

Approved and completed permits in the Permian, by quarter of approval and by state

You can find here that of the 1,234 approved permits in Q4 last year, just over half (624) were located in New Mexico.

EOG was with 718 approved permits in 2020 far in the lead in that part of the basin.

The following graph shows the ranking of all counties by the number of approved & completed permits in 2020:

Permits-ranking.png

Ranking of counties in the Permian by # of new permits in 2020

This dashboard also allows you to investigate the exact permitted locations and other details.

Top Operators

In the final tab (“Top operators”) the production and positions are displayed for the 10 largest producers in the Permian. Chevron was the only large operator that set a new output record in October, at 200 thousand b/d of operated production. Several mergers and acquisitions are expected to close in the coming 2 months, which will then be reflected in this dashboard.

Advanced Insights

The ‘Advanced Insights’ presentation is displayed below:

Adv.-2.png

This “Ultimate recovery” overview displays the average production rate for these wells, plotted against their cumulative recovery. Wells are grouped by the year in which production started.

The impact of shut-ins is less visible than we saw earlier this week in our post on the Bakken. Recent vintages are trending towards a recovery of about 450 thousand barrels of oil, on average, before they have declined to a production rate of 10 bo/d.

Finally

We will have a new post on the Eagle Ford early next week.

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

Visit our blog to read the full post and use the interactive dashboards to gain more insight: https://bit.ly/35GwEiW

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