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Edited: Jun 04

Delaware Basin Leasehold Map, 2025

These are always fun to look at, and informative if you know what to look for. Thanks to the OSC Permian Basin Land Department for this.

Some quickies:

The EUR core is pretty close, +/- 25 miles.
EOG has 2,900 wells in the Delaware and FLOW says they are done in <4 years. They've got no flank stuff to move to, when they are done, they are done. Thats why they are fleeing to the Utica, like the Beverley Hillbillies.
Chevron's acreage out here in the West is not in good places. It may have a lot of fee land out here with 100% minerals and/or 93.75% NRI's, but 100% of little is little. They are sending employees home, or to the DJ Basin, the Permian is not the place they oughta be.
Exxon is in gas land and you can see clearly how potash has blown big holes in its hopes for those lofty guidance goals it has never been able to reach. Well, there is always re-frac's.

This entire basin's productive limits are defined now and it's stuffed with 23,000 active wells. Produced water is a major problem out here. Bone Springs benches communicate with each other sideways, up and down. The area around 9 on the EUR core, in West Reeves County is about ready to bust from SWD. This is earthquake city (Toyah).

The Delaware Basin, even more than the depleted Midland Basin, is America's last hope.

11 comments

Comments

Conway Carriage

Who the hell would you fire oil field staff if they didn't have to? Talent is getting harder to come by, why risk your future if you are "swimming in cash"? Occams razor, they are hemorrhaging cash. Pretty soon they won't be able to hide it in swaps and mezzanine debt and zombie corps. The Piper is going to get paid

Edited

Mike

This is never a good sign, no matter what Chevron says. They have decided they can save a few bucks by outsourcing to India. Google it.

Remember one of the benefits of exporting Permian Basin tight oil to foreign countries is the high paying jobs it creates in Texas. Pftttt.

So, Anne with the OS.C Midstream Department quotes:

"Bingo. As shale names innovate by firing all Americans and drilling 6 mile Permian wells remotely with talent in Bangalore we could theoretically see $1.00 breakeven Permian wells."

Edited

Mike

Kindly remember, please, on a typical (sic) four well pad it will take at least 2 months to MIRU, set pipe on all wells, and RDMO. It then takes 2-3 months to organize water, begin tank battery buildout, etc.,and wait on a frac spread to arrive. It will then take another month to frac those 4 wells, give or take. Then it will take a month to finish tie in and get them flowed back and stabilized. Then it will take another two months for the Texas RRC to report the production from those four wells to the public, by a new lease number or an API number pending lease numbers. Six months from spud to reported first production, minimum. Maybe more.

So, if March set yet another record for U.S. C+C production the trigger was pulled on those wells back in October of 2024, before the election. When prices were in the high 70's to low 80's and pipe costs were pre-tariff, from the yard inventory.

Things changed, drastically, in late March of 2025 with the onslaught of tariffs. Oil prices are down 20%, costs are up at least 15%, and the rig count in the Permian, for instance, is down 30 since the first of the year. Completions are down. None of that will show up until 3Q25.

None of what you see has anything whatsoever to do with greater efficiency, or more resilience, drill baby, drill, or anything of that hooey. Its timing. Nothing in the oilfield happens in real time, in the shale business everything is delayed by 6 months. The drops we will see in U.S production will not occur in 2H25. If oil prices go to $50, decline in 2026 will suck you off your feet.

Edited

Mike

Jun 04

Blue is Chevron, Here you can see all of its shallow Platform production including McElory in the Crane/Upton line that's leaking injected water like an old man with incontinence.

In Culberson County that position just west of Reeves County is a giant unit named Wise. All those wells are classified as gas wells based on initial GOR, I believe. Cimerex is all around Chevron in the checkerboarded stuff; there is some sort of relationship between Cimerex and Chevron or at least Cimerex and the checkerboarded stuff. I don't understand all this. I do know this stuff does not make a lot of money. They could drill 14 mile laterals out in the country and not have a problem, they don't.

Chevron has a big block in Eddy County that is also very gassy. The Yellow checkerboarded stuff is Oxy's $50 B deal with Anadarko.

How gassy is gassy and how much water does Chevron produced out in the Delaware that is surely causing problems in the Toyah SRA?

Shit loads of both, excuse my oilfield language.

Mike

Jun 05

Replying to

Nobody is a nobody, Blake, and I am happy to hear from you.

Oxy's acreage is way better than Chevron's, for sure. But when I looked last a few years ago its wells were sort of crummy, or so I thought. I don't know anything abouts its financial condition except its debt gives me the heebie jeebies and its interesting to hear its CEO, whom I like, poo-poo shale now and then. I suspect if she could get a do-over on the Anadarko thing, she'd take it. All I can say is I don't know how anybody out there in the Delaware can make enough money with gas below $6-7 per MMBTU to ever get out of debt. And the big boys in the Delaware, like EOG, Exxon, Chevron, Oxy, Devon, COP, P. Resources, wow do they have a lot of debt.

I am sure it has turned this around a bit over the past few years because of longer laterals.

Please don't do anything financially based on my dumb ass opinions. And thank you very much for what you said. I appreciate that.

Edited

Blake Hampton

Jun 05

Replying to

Thanks.

You know, one of the messages I keep hearing from you is, "What are we leaving our kids," and in a lot of ways I agree. I'm in my early 20s though, so I guess I'm still closer to the "kid" side of that equation than anything else.

I think one important thing to consider with these debt loads is maturity. The U.S. government is soon gonna be running structural deficits of $2.5 trillion, and at some point, I believe that this situation has to become very inflationary. We could even see problems in credit markets preceding all of that; but that’s a discussion for another time.

All I’m saying is, having a lot of very long-term debt might not be the worst thing.

But debt is certainly still dangerous.

Edited

Mike

Jun 06

Replying to

Blake, any debt associated with oil and gas production, particularly production that declines as quickly as shale oil, and shale gas, is bad debt. I think that has already been proven, at least to me. Now that the shale sector is 25 years old, truthfully, it should have no debt. But it is a bad business model and cannot function without debt.

As an adult, and a parent, I must tell you I am feeling very un-adult like to be leaving you, and your generation with the debt we are, this strictly from an oil and gas production standpoint. My industry I do not believe failed you; the shale oil and shale gas sector has failed you. 100%.

donupstream

Jun 04

Great post as usual Mike.

Mike

Jun 04

Replying to

Thank you, sir.

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Delaware Basin Leasehold Map, 2025