[Report] The 4 Major US Tight Oil Basins - Q1 2023 | The Permian, Eagle Ford, Williston and DJ-Niobrara

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In this report, we will analyze the latest developments in the 4 largest US tight oil basins, which include the Permian, Williston, Eagle Ford, and the DJ. Together, these basins produced more than 7.2 million barrels of oil per day at the end of last year.

1. Total production by basin

The following overview shows the total tight oil production history for each of these basins through Dec 2022, as well as the location and contribution from each of the counties within these basins.

Total tight oil production in the 4 major basins, through Dec 2022.

 

What is striking here is that, except for the Permian Basin, production in all basins has stagnated, and is below their all-time highs. Only the Permian has contributed to production growth and is with 5 million b/d far ahead of the others.

 

2) Drilling activity

The horizontal rig count in these 4 basins has increased in the past 1.5 years to 473 at the end of Q1 2023 (source: Baker Hughes). However, with WTI down by $50 since June last year, we do expect an impact on activity levels soon:

horizontal rig count, by basin, and WTI (right-hand side).

Of these 473 rigs, 72% (339) are active in the Permian.

 

3) Supply projection

How would the future for these basins look if the rig count, rig efficiency, and well productivity remained the same? From our Supply Projection dashboard we can see the following picture:

horizontal rig count (top) and historical and projected tight oil supply (bottom).

 

If we assume a constant rig count and no changes in rig efficiency and well productivity, we can see in the bottom chart that tight oil supply would continue to grow in the coming years, again mostly driven by the Permian. However, this is probably the optimistic scenario, as we do expect a drop in the rig count in the next few weeks and also witness a slight decline in well productivity.

 

4) Conventional onshore production

Novi Labs now also covers conventional oil production in the Lower 48 states. The following chart plots the onshore oil production from non-horizontal wells.

 

 

Total conventional onshore oil production in the Lower 48, by vintage, through August 2022.

Conventional onshore oil production has halved since the year 2000, to about 1.4 million b/d last August. The decline has been especially severe since 2014.

 

5) Well productivity trends

Next, we'll examine how well productivity has changed over the last few years. The following graph plots the average cumulative oil production in the first 6 months, by the first production date:

Well productivity in the 4 US tight oil basins. Horizontal oil wells only.

 

As you can see, based on this metric, well results have stagnated. In several basins, including the Permian Basin, the peak in average productivity seems to be in the past. The Permian was in Q2 2022 slightly ahead of the Williston, with 113 thousand barrels of oil recovered in the first 6 months, on average. These results are not normalized for the increase in lateral lengths over the years; doing so would worsen the results displayed above.

 

6) Permit activity

Permitting activity for new horizontal wells was up y-o-y in Q1 2023, but down from the 2nd and 3rd quarter of 2022:

Permit activity for new horizontal wells, by basin and quarter.

 

In Q1 2023 about 3000 new permits were approved for new wells, 5% lower than in Q3 last year. Almost 2/3rd of these permits were given in the Permian.

 

7) Top tight oil producers

Finally, we'll share a ranking of the 12 largest tight oil operators within these basins and their production history through December 2022:

Production history (b/d) of the top 12 tight oil operators in these 4 basins. Hz

 

ConocoPhillips and EOG are vying for the first spot, with each close to 600 thou- sand b/d of operated tight oil production in these basins. Mewbourne and Endeavor Energy are showing some impressive output growth and are now at about 200 thousand b/d, just above Marathon.

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Would you prefer to download it as a PDF instead? Download the full report here: https://bit.ly/418PnxE
 

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*All the graphs today come from Novi Insight Engine, which is an online analytics platform filled with interactive dashboards that allow you to explore the most recent shale oil & gas related data