The End Of The Shale Oil "Miracle" In Sight; New Well Output Falling Rapidly In Multiple Regions
EDIT
Oil production from the best 10% of wells drilled in the Delaware portion of the Permian was 15% lower last year, on average, than top 2017 wells, according to data from analytics firm FLOW Partners LLC. Meanwhile, the average well put out 6% less oil than the prior year, according to an analysis of data from analytics firm Novi Labs.
The atrophy of once-booming sweet spots has big implications for the global oil market, which years ago could count on rapidly growing U.S. oil production to blunt the effects of supply disruptions and rising demand. Without successful exploration or technological advances, the industry’s inventory constraints are expected eventually to push companies to tap lower quality wells that would require higher oil prices to attract investment, industry executives say.
EDIT
The recent degradation in well performance has stoked executives and investors’ concerns about the industry’s runway for growth, and has led companies to consider mergers this year. Companies such as Chevron Corp.,CVX -0.63%decrease; red down pointing triangle Devon Energy Corp. and others that have held the Permian up as a central pillar of their future plans saw top wells yield less crude last year than the previous year.
Chevron, one of the largest landholders in the Permian, drilled some of the region’s most prolific wells in Culberson County, Texas, but some of its newer wells there have seen productivity decline. The wells Chevron brought online in Culberson County last year are ultimately expected to produce 42% less oil, on average, than wells that began producing in 2018, according to FLOW’s estimates. The top 10% of wells Chevron brought online across the Delaware last year were about 25% less productive on average than its wells the year before, according to Novi Labs data.
EDIT
https://climatecrocks.com/2023/03/09/as-us-gas-exports-rise-drilling-production-falling-off-something-is-going-to-give/#more-83785
