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Hotel Wolfcamp

This is the surveyed plat of Well No. 15H on The Texas Ten Miles 370 Unit, filed with the TRRC in conjunction with a W-1 Drilling Permit in Midland County, District 08. Its a Pioneer (PXD) well, naturally; Pioneer owns Midland County. This is...Saudi America.

In this plat insert, immediately above, on a larger scale, one can see there are nine drilling pads, or separate surface hole locations (SHL) for 43 horizontal wellbores, existing or permitted, all operated by Pioneer and all located in the Spraberry Trend and/or Wolfcamp Trend TRRC designated Fields. On the actual plat filed with the drilling permit for the No. 15H well there is another SHL pad with 5 more wells on it to the north, with laterals that wander off to the north. In other words, there are wells EVERYWHERE. Spacing in both referenced fields is 330 feet between wells. The filing of the 15H is 279 feet east of the...oh shit, I don't know. This is a stinking mess.

There is even a smattering of active vertical Spraberry wells on this surveyed plat; I don't know how that prorated acreage gets shoved under the regulatory rug when drilling HZ wells. You are not suppose to double assign acreage in Texas.

But where there is a will, the TRRC will always show you the way.

In the contiguous drilling units shown in the plat there is still room for more Wolfcamp/Spraberry wells in both units and they'll be a lot more snaking around of radiuses from limited surface locations to get laterals planted...provided wells don't keep getting worse than they already are, please see below.

On the surface this little area of Midland County must look something like this, with not a poor, skinny cow in sight:

9,0000 feet below sea level it must look something like this, a bowl of stinking noodles:

Look, if anybody on the surface of the planet can make this HZ shit work on 330 foot spacing, its Pioneer. These guys know what they're doing.

Rest assured, there was no rubbing, banging, clanking, or inappropriate touching going on, must less collisions, with all these well bores jammed so close together and every POP, or FTP is within a foot of where they should be. Sorta. If its good with the TRRC, its plenty good with me. Everything is being drained... properly. Sorta.

It's know... busy out there. Crowded. Rooms in the Wolfcamp Hotel are getting hard to come by, it looks to me like.

Lightheartedness aside, this chart below is a little worrisome to me...

I like Pioneer, their boss is, for the most part, shooting straight with folks. He says not to expect too much more from all this tight oil stuff and it just looks to me like he's right, just not for all the reasons (excuses) he says. If I interpret all this great (Novi) data (realized production data filed with the TRRC), and I do, it appears that Pioneer today has to drill five wells in its neighborhood to recover the same amount of oil it did 30 months ago, with just four. In other words, like every other oilfield in the world, the Permian Wolfcamp is starting to show signs of fatigue.

Permian tight oil wells are becoming less productive, initially and subsequently by virtue of what also appears to be declining EUR's. Further, late life decline rates from legacy wells (50% of all tight oil wells in the Permian Basin now make <50 BOPD and oodles of water), appear to be accelerating in lots of core areas of the play.

So what?

Well, exporting 70% of Permian HZ tight oil production to foreign countries is really stupid energy policy. We should be conserving what's left of remaining oil resources from the Permian Basin for our kids, for our nation's long term energy security, to help ensure a more realistic transition to renewables some day in the future.

Its time those in America in charge of energy policy, try and think past next week.


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