Here is Novi's take on longer Permian laterals, just out.
I need to make sure people see this, and a comment from Christine Guerrero on LinkedIn about longer laterals from Rystad.
You can read about it here on Lindkin: https://www.linkedin.com/posts/ted-cross-tx_long-laterals-are-more-important-than-ever-activity-7265006855918149632-L29u?utm_source=share&utm_medium=member_desktop
Strong economics is qualatative. No well costs mentioned for us to make up our own mind on economics; just a reminder that gas and gas liquids is approaching 50% of the production streams from new Permian wells and WaHa is still a negative number.
Black lines are plus 3 milers and those EUR's are lower, as I have suggested many times.
No word on how many of these super long laterals there are to drill in the Midland Basin, or out West...not many left, IMO.
Increased lateral length has been a major driver of improved per-well productivity and drilling efficiency numbers that have driven solid 2024 production. With 4-mile tests now coming online, extended laterals are more important than ever in the Permian.
Improved per-well productivity means on an IP90 basis, as I pointed out in my post...not by EUR. Higher up front cash flow gets to payout faster, but does NOT necessarily make more money in the long term. Novi likes 2 year payouts as that is the basis for much of their remaining drillable location predictions. So, it likes longer laterals because they pay out faster.
I stayed in the oil business for over 50 years, as a producer, never borrowing money to drill a well, ever, by liking EUR's and ROI's. I liked the 25:1 ROI's the best !😁
Hello Mike.
I just saw the post on Twitter.
in response to a comment he posted the spacing
Posts by Christine
Christine Guerrero Christine Guerrero • 1st • 1stPetroleum Professional, MBA, Strategic Advisor and Drilling SMEPetroleum Professional, MBA, Strategic Advisor and Drilling SME59m • Edited • 59 minutes ago
The question on every Oil & Gas Investor and industry participants' mind going into 2025 = Is the Permian Basin at Peak or Plateau?
Uphole Novi says longer laterals in the Permian Basin are the greatest thing since peanut butter and jelly sandwiches and because of longer laterals (short term) well productivity is going up. Accordingly, well economics are great !
If thats true then why does Rystad say longer lateral footage is going down; it should be going up, not down.
Again, look at a TRRC GIS map of the Permian, its got 55,000, 5,000 ft. lateral wells crammed into core areas and there is just not much more room for longer laterals. When the bloom is off that bush the Permian is going to tank. The only thing that will keep it propped up will be more rigs, Lots more rigs. And that will take lots more money the sector does not have.