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Rising GOR in HZ Wells In The Midland Basin?

No problemos, says Enverus

This was sent to me by a smart PE buddy of mine operating in the IB. It appears to be a recent quote from DrillingInfo (Enverus), a rebuttal to Scott Lapierre's work regarding Midland Basin GOR's, titled Death by Bubble Point, his latest article on the subject, here.

The author of these Enverus comments, an engineer I assume says, "...of rising gas to oil ratios and so called, 'bubble point death'... we (Enverus) do not believe it is a pervasive issue in major horizontal oil plays in the US."

Click to enlarge

Exhibit A

Above is the production profile used by Enverus in its rebuttal showing oil productivity for a 450 well sample size from 2014 in the Midland Basin HZ play.

Below is my buddies rebuttal to the Enverus rebuttal using a sample set of 456 wells completed in 2014 from Midland, Martin and Upton Counties in the Midland Basin. His data is actual realized production data filed with the Texas Railroad Commission, made available via About the same number of wells, same semi-log plot, same lateral length normalization...all the parameters are the same as Enverus.' He used the top three producing counties in the sub-basin, by the way, to match the well numbers.

Exhibit B; Click to enlarge

A big difference, uh? Enverus projected 75K BO per 1000 feet of lateral for 2014 wells, realized production data filed with the TRRC is actually only 26K BO.

So why is Enverus using six year old data from the Midland Basin to argue rising GOR is not a problem in any US shale oil basin? Data that is clearly wrong, by the way, and, as my PE buddy says, does not remotely support the dire financial health of most HZ operators in the Midland Basin?

Beats me.

If Midland County HZ wells are not pooping out much quicker than anticipated from rising GOR, they sure look like they've gotten pretty sick. Below is a chart for gas to oil ratios in the Midland Basin HZ play. Using the same sample size we find 2014 wells to have a GOR of 4 and total gas in the Basin on the way to the moon.

Click to enlarge

Rising GOR in the Midland Basin, or any major horizontal play in the US is a big problem, at least to this old hand. We don't have to be engineers to know its "pervasive" as hell with regards to well economics. They don't flare that stuff in West Texas because it's worth a lot of money.

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