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December oil production came in at 4 million bo/d (after upcoming revisions), almost double the output compared with 2 years earlier (2.1 million bo/d). Natural gas production topped 14 Bcf/d, after growing even faster than the Marcellus in the last 2 years.

In the “well quality tab” you can easily see how well productivity has evolved over the last decade. Performance edged again higher in 2019, but the relative improvement since 2016 has been minor. In fact, after only considering oil wells and normalizing for lateral length (possible only in our our advanced analytics service), we now see the first signs of a small deterioration in well results compared with wells that began production in 2016.

The industry has been hit extremely hard by the major oil price drop this year. Many wells that are producing at less than 50 bo/d are uneconomical at current prices. In the Permian, almost half of the 26 thousand horizontal wells is below this level. This is still a relatively small fraction compared with the other shale oil basins, where horizontal drilling started earlier (e.g. almost 80% for the Eagle Ford) or declines are higher (DJ-Basin). It also does not constitute a large percentage of total production; these wells produced just about 5% of total production in December (200 thousand bo/d) in the Permian, which you can see in th chart above if you change the “Show production by” to “Production level”.

In the final tab (“Top operators”), the total production of the 8 leading operators in the Permian is displayed, including their well positions. Exxon Mobil, the number 5, showed quite a large decline in output in December. However, it mostly recovered from this a month later, based on preliminary data for January (available in our paid subscription services),

The ‘Advanced Insights’ presentation is displayed below:

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.

Early next week, we will have a new post on the Eagle Ford. We also hope to share a new dashboard from ShaleProfile Analytics later next week, in which the future oil & gas supply is projected, based on certain rig count and efficiency/productivity assumptions.

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.

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

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