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"However, it won’t last forever, and there are signs that it may be close or already peaking. The same EIA report that shows more productivity per rig, also shows nearly every basin having steeper legacy oil production change from last year. It’s harder to fill a bathtub if the drain is getting bigger." Forbes
Its always a good idea to read the fine print when you see stuff like this and ask yourself some questions. In this case the goal posts have been moved from one year to six months to three months as a defintion of improving well performance. So, yeah, for the first 90 days, wells are better. Why? How can wells have improved 16% over a period of nine months?
Longer laterals.
In sweet spots of core counties.
On wider spacing.
How long do you think that will last? How many plus 15,000 foot laterals can they drill in sweet spots that are already packed with
6 and 8,000 foot laterals? They have been "highgrading" sweet spots since the get go. How much longer can that go on?
So when you look at the definition of improving well performance, the time frame is shorter and its because of operational choices to increase cash flow, not improve long term producivity. This is snap shot of a situation in a given time.
It cannot continue much longer.
IP90's are better, sure, but over the next 9 t0 12 months these wells fall hard and fast and their cummprod's and month 14 are lower than previous years.
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The materials provided on this site are for informational and educational purposes only and are not intended to provide tax, legal, or investment advice. I may make data related mistakes occasionally; if you use my opinions about oil reserves or shale well economics for financial purposes, to buy or sell stocks, your nuts. Don't do that. If I have used a photograph incorrectly it was for educational purposes and I have done my best of to give credit where credit is due. My stories are all true, slightly embellished, perhaps, but true; I don't change names to protect the guilty. I am as accurate as possible about history and historical facts; I work very hard at that.All rights are reserved, whatever that means. Don't blame me, I didn't do it.