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“Although majors and large independents can operate below $50/bbl, this price level would enforce cautious activity for most,” Kpler analyst Johannes Raubal wrote in October. “A severe, sustained $50/bbl scenario—a view held by some agencies and banks like Goldman Sachs—would cripple US crude supply,” he warned. Yet here’s JP Morgan, predicting continued growth in U.S. shale oil production, leading to a further slump in oil prices, potentially as low as $30 per barrel.
Here is a Novi chart for Permian Basin HZ tight oil wells drilled from 2016 to July of 2025, all counties, all benches, normalized for lateral length.
Bloomberg recently reported that all HZ shale oil wells in America now decline 90% in the first 36 months of production life; this chart confirms that 2022 Permian wells decline 89.6% in 36 months.
Note, however, how successive years, 2023, 2024 and one half of 2025, have gotten worse in terms of decline rates, all of which will, of course, lead to lower EURs, the ONLY metric that should matter to most Americas concerned about their oily future.
This is all a function of longer laterals that have slightly better IP180-360s, but then decline faster. The bigger they are, the harder they fall.
So longer laterals are more cost effective to drill but they do NOT increase EURs and are only adding 'more' production to the U.S. for brief periods of time.
When there is no more physical room for drilling 3 mile laterals squeezed in between tens of thousands of pressure depleted 10,000 foot laterals,
production in the Permian HZ play is going to fall and fall hard.
Robert D. Flaherty Photography
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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.
