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"We've had dialogue with the administration letting them know that oil prices in the low to mid $50s make returns increasingly difficult for investment. This will eventually make current production levels unsustainable," said Denzil West, CEO of Admiral Permian Resources, which produces about 25,000 bpd. Inflation and some of Trump's trade tariffs have raised production costs for oil, which means oil companies need even higher prices to make money than they did in previous industry cycles.
Here is a Novi chart thru May of 2025 for Permian Basin tight oil wells classified as tight gas wells because they have initial gas to oil ratios
(GOR) over 10 MCF to 1 BO. These wells are lousy liquids wells (crude + condensate) but make on average 4.8 BCF of gas and some 65MM bbls.
of natural gas liquids before they decline to less than 100 MCFGPD . They also make Bou coup of water, as in oceans of it.
Culberson County is home of Cimerex and its successors in interest, as well as Chevron, that has really good fee leases and/or net
revenue leases of 90+%. As you can see these wells decline like somebody cut the cables on an elevator. 2025, however, is still growing because
people using other people's money get excited about higher natural gas prices and put rigs back to work when those
prices get over $4.00. The problem with that is that prices are really high right now because it is colder than a well diggers ass up north. The average
price of associated gas in the Delaware Basin, after all the temperature related cycles, which people that spend other people's money
don't ever talk about, probably nets less than $2. Remember, this is WaHa country. These wells struggle to make 30% ROI's over 20 years.
Culberson County tight oil (gas) wells in the Delaware Basin are the hopes that dreams are made of...and $72 billion dollars of LNG export facilities are built on, also with other people's money.
Really dumb internet experts, which there are now literally millions of, think associated gas from tight oil wells last forever...the 4.8 BCF of mean average EUR per Culberson County well goes plum over their heads.
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The materials provided on this site are for informational and educational purposes only and are not intended to provide tax, legal, or investment advice. I may make data related mistakes occasionally; if you use my opinions about oil reserves or shale well economics for financial purposes, to buy or sell stocks, your nuts. Don't do that. If I have used a photograph incorrectly it was for educational purposes and I have done my best of to give credit where credit is due. My stories are all true, slightly embellished, perhaps, but true; I don't change names to protect the guilty. I am as accurate as possible about history and historical facts; I work very hard at that.All rights are reserved, whatever that means. Don't blame me, I didn't do it.
