Something Is Fishy
Permian Basin HZ tight oil IS U.S. "oil" production growth, and the Permian is still growing, according to the Energy Inaccuracy Administration, even up to the 3rd week in October. Wow! How do they DO that?!! There must be EIA gaugers all over the Permian!
Despite the fall in active drilling rigs, weekly U.S. crude oil production reached a new high of 13.644 million barrels per day in the week ending October 24.
I've shown you with a lot of Novi (TRRC) data lately that longer laterals are resulting in 20-25% higher IP180's, but over the next 6-8 months those same wells are declining rapidly. 2024 appears to be the exception to that rule. In many cases these longer laterals are resulting in lower cumprods. at various months in the well's life span, the implied EURs lower. See a comment downhole about this.
There is now considerable study underway by Novi and others as to the extent of parent-child well over-drilling on too close spacing between wells and degradation (pressure depletion); it is significant in the Midland sub-basin. This degradation MUST also be increasing decline rates from existing, legacy wells. Has to!
Gas and NGL's is becoming a larger portion of the production stream all over the Permian, reaching near 50% in the Midland.
Rigs are down in the Permian by a count of 52 year over year (2024-2025) according to Baker Hughes. Fewer wells are being completed in the Permian. Given 6–8-month lag times between reported rig counts and the first, published production data from a new well, ALL indications lead to lower crude and condensate production by 4Q25.
Adjustments?
I believe this HFI Substack article, above, is relevant. Then, there is neat graphic to keep in mind from Enterprise Products Partners submitted by Anne:
Best to not question Enterprise Product Partners on this.
This is an enlarged Cum Oil vs. Time chart from Novi showing how much better initial IP's were in 2024 than 2023 for HZ tight oil wells drilled in the Permian. This is straight from the horse's mouth, the TRRC, realized production data. I often refer to this phenomenon as IP180's (6 months) but in 2023 increases in productivity are holding together at month 17. I believe this change in 2024 was almost entirely based on longer laterals. Whether its longer laterals or some other unknown function of "efficiency," its impressive.
But look what is occurring in 2025. These would be the wells to be considering when looking at production increases for the U.S and new record highs. Those drilled in the first quarter of 2025 are just now coming online and their production published. 2025 is a slight improvement to 2024 (nothing like 2024 and 2023) but look what happens at around month seven. 2025 wells are declining faster and coming into parody with 2024 wells for remaining recovery rates.
So, we can see why the sector is pumped up about fewer wells but greater efficiency, whatever that means, and 2025 is almost as good as 2024, until they get a little older. If the apparent trend holds 2025 wells won't be as good as 2024 by month 17 and beyond. Is this pressure depletion, or degradation, as Novi calls it?
Remember, while all this good stuff is going on, legacy wells are declining, and I believe at an accelerating rate for two reasons: 1.) pressure depletion and 2.) adding, longer lateral wells that are declining at much steeper rates.