This new EIA data suggests that the Texas side of the mighty Permian Basin HZ tight oil play is, in spite of rising rig counts in the Lone Star State, still declining... and New Mexico is still increasing.
All of this New Mexico HZ tight oil comes from two counties in the S.E., part of Lea and part of Eddy County. Just these two counties have had over 50% of the HZ rigs running in the entire Permian Basin for the past 20 months.
Should you be worried about Texas poopin' out already and New Mexico hammering away at its last remaining drilling locations in the Bone Springs and Wolfcamp like there is no tomorrow? Well, if you believe Rystad; they suggest the entire Delaware Basin is going to peak next year, 2023.
And here is some past data, filed with the State of New Mexico that suggests Exxon's well productivity is on the express elevator to hell in Eddy County...
And EOG's well productivity in Lea County is sinking like a ship anchor dropped at sea...
And late life decline rates in New Mexico's two top producing counties is accelerating, not declining...
And the entire damn Bone Springs and Wolfcamp party in S.E New Mexico is getting gassier, particularly where Exxon is King in Eddy County...
And gassier...
So should you be worried?
Hell yeah you should. I am. What is happening in core areas, in the sweet spots of significant operators like Exxon, EOG, Conoco and Devon IS not cherry picking, its significant, That is a look-see into the near future. Even at high product prices, oil and natural gas, there is still a lot of high grading of these core areas going on. Why is that, do you suppose? More importantly, how much longer do your think those core areas in two counties of New Mexico can carry the day for the Permian Basin.
Are you 100% sure that when the cores are depleted all that goat pasture out west is going to carry America to an economically successful transition to renewable energy? Or are you just relying on what other people want you to believe?
Past results in the oilfield have never in history been indicative of future performance. New Mexico's HZ tight oil play is going to run out of reasonably affordable Bone Springs and Wolfcamp oil much sooner than people think.
Then what?
Commentaires