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Permian – update through April 2019

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Permian – update through April 2019

This article contains still images from the interactive dashboards available in the original blog post. To follow the instructions in this article, please use the interactive dashboards. Furthermore, they allow you to uncover other insights as well.

These interactive presentations contain the latest oil & gas production data from all 21,872 horizontal wells in the Permian (Texas & New Mexico) that started producing from 2008/2009 onward, through April 2019.

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With more revision data in, it is clear that a new record was set in March, at about 3.4 million bo/d. I expect that April production will eventually come in close to this level as well. Gas production is rising even more steeply, with over 11 Bcf/d produced in March (switch ‘product’ to gas to see this). Given that the gas/oil ratio rises over time for most of these wells, we expect that this trend will continue.

In the ‘Well quality’ tab you can find the historical production data for all these wells. The bottom chart reveals that initial well performance has kept increasing over the past 8 years. But the rate of improvement has slowed down, and once you correct for the fact that since 2016 laterals have increased by 18% (and proppant loadings by 50%!), this looks even less impressive. In our analytics service you can easily normalize production data for these factors, and these trends can be analyzed by operator and area.

The final dashboard, “Top operators”, displays the production history of the 5 largest producers, with Concho and Pioneer Resources in the lead. Once the acquisition of Anadarko by Occidental is completed, Occidental is likely to overtake Concho as the top operator in this basin.

The ‘Advanced Insights’ presentation is displayed below:

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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 steady increase in initial production rates, and higher EUR trajectories, is also visible here (not taking into account the forementioned changes in completion parameters). The increase in gas output shows a similar rise; recent wells are on track to recover about 2 Bcf of natural gas, which unfortunately for the operators is not earning good money at the moment.

If you scroll to the right, you will find the 9th tab (‘Gas oil ratio’). The top chart in this dashboard displays how the gas/oil ratio changes over time, by vintage. Recently completed wells start with an average gas/oil ratio (GOR) of about 2 Mcf/bbl, which then appears to increase to about 4 Mcf/bbl by 2 years on production. The 2012 and 2013 vintages are already well over 6 Mcf/bbl, and still rising.

In our advanced analytics service we show the latest GOR for each well on a map, and you can compare these GOR profiles with the related production profiles:

 

GOR trends in the Permian

Click on the image to see a high-res version of it.

This week, we were asked several times what we thought about the recent report by Kayrros.We don’t support several claims that they make, such as that well productivity in the Permian is substantially overestimated. It is common knowledge that there are lag times involved with the state agencies and FracFocus. However, production in Texas can only be reported once a well has been assigned to a lease, otherwise it will be reported separately, using the well permit ID.

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.
  • FracFocus.org

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