THE MAJOR TIGHT OIL BASINS — February 2021
The Permian, Eagle Ford, Williston and the DJ-Niobrara
Last week there were 245 rigs drilling horizontal wells in the major tight oil basins, up from 143 in August 2020, but still more than 50% lower than in early 2019. Read more about what happened in these basins in our latest report:
In this monthly report, we will analyze the latest developments in the 4 major US tight oil basins, which includes the Permian, Williston, Eagle Ford, and the DJ-Niobrara.
The report answers the following questions:
1- Drilling activity & outlook
2- The top oil producers
3- Well performance comparison (by basin)
4- Well status
5- Permit activity
1) Drilling activity & outlook
In this monthly report, we will analyze the latest developments in the 4 major US tight oil basins, which includes the Permian, Williston, Eagle Ford, and the DJ-Niobrara.The report answers the following questions: 1- Drilling activity & outlook2- The top oil producers3- Well performance comparison (by basin)4- Well status5- Permit activity
The projected tight oil output shown in the bottom chart assumes that the rig count (plotted in the top chart) stays constant and that rig/well productivity also remains unchanged. These are all unlikely assumptions, but it’s an interesting base case nonetheless. The interactive version of this dashboard allows you to create projec-tions based on your own assumptions.
In the scenario above, tight oil output will stay above 5 million bo/d and the portion produced in the Permian continues to grow. This projection will probably err on the low side in the near term, given that the trend in drilling activity is clearly upwards.
2) The top oil producers
The following dashboard gives an overview of the top-15 oil producers within these basins
In this graph, all historical production from a well is allocated to the operator which is currently operating it (in the interactive version this can be changed). This explains why suddenly (after its recent acquisition of Concho) ConocoPhillips’ historical production is close the EOG’s. Pioneer Natural Resources bought Parsley, and soon Devon’s acquisition of WPX will also be reflected.
Occidental shows a notable production decline in 2020, as it completed fewer than 300 wells during last year.
3) Well performance comparison (by basin)
How do these 4 basins compare in terms of well performance?
In the following chart, you can see the actual, and projected type curve for the 2019 vintage in each of these basins:
Only horizontal oil wells are included and the thickness of the curves indicates the relative well count. Whenever we receive new production data, we update these production forecasts (for both oil & gas, on well level) automatically. They are 20 years long.
The chart shows that we expect that the average horizontal well that came online in the Permian in 2019 has an oil EUR of 450 thousand barrels vs about 500 thousand for those in the Bakken. Performance in the other basins is far lower on this metric, although more associated gas is produced there.
4) Well status
Since the start of 2014, the number of producing horizontal oil wells in these basins more than tripled (21,456 -> 70,965), but the number of wells that are producing below 25 barrels of oil per day increased almost 7-fold (4,695 -> 32,209) as is visualized by the top of the dark blue area. Now almost half of the wells fall in this category.
The many shut-ins that happened during April-July 2020 are also clearly visible in this chart.
5) Permit activity
Last year we introduced a new dashboard in which permit activity can be easily monitored. In the following chart we can see how the number of permits for new horizontal drills within these4 basins has evolved since 2010:
The total number of approved permits is displayed here, by quarter and by permit status. It reveals that in Q4 2020 permit activity continued to increase (with 2,211 approved permits), after the 3-year low in Q2.The interactive version of this dashboard allows you to see which operators submitted these permits and where the permitted locations are exactly.
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