Update on the Permian Basin and Oil Market Outlook

March 13, 2019

Blog.gorozen.com

The authors think they are seeing the first signs of field exhaustion on the Midland (Eastern) side of the Permian.   They cite productivity growth between 2013 and 2017 per lateral foot in the Permian as growing materially by 20% compounded per year.  However, they claim that in 2018 that growth slowed to 3%.  Comments from oil field service company Schlumberger in its Q3 conference call alluded to disappointing results in so-called “child wells” in the Permian. “Parent” wells refer to the first well drilled on a pad in a virgin section of land, while “child” wells simply refer to the subsequent wells drilled. The fact that the child wells were experiencing performance degradation of as much as 30% compared with the parent wells suggests that the wells are “communicating” with each other, which is a sign that a field is progressing into its middle-life phase of development.

The full article:

http://blog.gorozen.com/blog/update-on-the-permian-basin-and-oil-market-outlook