Two fun facts about Permian region tight oil (shale fracking) production. In 2014, the average rig drilled about 1.2 wells per month. Today, that number is 1.6. Meanwhile in 2014, the average new Permian well produced 200 bpd. Today it's 1600. Per rig crude production productivity is up 11x.
Yet gas prices increased 50 cents a gallon since Trump took office.
my god
I couldn't believe the numbers when I saw them, it's unREAL.
In my mind the biggest concern is the Permian Basin Superorganism
And yet the costs are so much higher
yeah but not by a factor of 10 lol
Right but i mean breakevens are super high right?
Breakevens in the Permian were $61/bbl on average in Q1 per Dallas Fed.
Wow, about a year ago iirc on Oddlots they were bragging that frackers can make money at 30. Wow.
The productivity numbers are insane - lateral lengths now commonly longer than 3 miles. Snag is depletion is so rapid - 2/3rds lower after one year and burning though high quality land so breakeven cost is steadily rising. FWIW something I wrote in May. www.breakingviews.com/features/the...
Eventually you run out of other peoples' milkshakes...
like idk if your cash breakeven on an existing well is $30 and $60 for a new one. and WTI is like $62 i think total profit might actually be comparable lol
Apparently efficiency gains don't make up for higher cost. Would be interested to see 2024/2025 decline rates too. www.artberman.com/blog/beginni...
this is right but there is still some squeeze left in the fruit (not for long tho)
Exactly what Berman says. But the fact the rig count goes down and everybody talking about free cashflow is telling. To what extend water consumption, well pollution and waste disposal is a real problem I dont know. www.houstonchronicle.com/opinion/outl...
Wildcats be wildcattin
The oil industry has become massively more efficient. A small silver lining in this new move away from renewables.