Production increases out of the Permian Basin HZ tight oil play are coming from the New Mexico part of the Delaware Basin. [1.]
The Texas Permian is beginning to lose ground.
Though the Midland Basin is vast in areal extent the six most prolific counties containing the most wells and the most production are Midland, Martin and parts of Howard, Upton Glasscock and Reagan Counties.
In early 2022 only 91,000 BOPD of over 2.22 MM (4%) BOPD produced from the HZ play in the Midland Basin is produced outside these six counties. In spite of much higher product prices since mid 2021, few operators are leaving their core areas for flank acreage; TRRC permitting numbers prove that. Large independent HZ producers in the Midland Basin, like EOG, Exxon, Chevron and others have been dumping acreage positions in Gaines, Andrews, Dawson and Ector Counties since 2019.
Above is a map by a well known data-sell company showing remaining HZ drilling locations in the guts of Midland Basin, graded from one to five in potential quality. Other data-sell companies have similar maps that imply the same thing...up to 15 more years of HZ wells to drill in the Midland Basin and America has nothing to worry about. Rarely does anyone making money from the tight oil phenomena have anything but good news to sell.
Far left in the map above are the cities of Odessa and Midland and WSW of that are Tier 1 and 2 Spraberry and Wolfcamp HZ wells. This is the area that Scott Sheffield of Pioneer Natural Resources likes to call, "Saudi America." Wherever there is a blank space in this area this data-sell company thinks a new well will be drilled of equal quality as previous wells drilled.
But gas to oil ratios in Saudi America have been going up and gassy oil wells are slowly becoming oily gas wells.
And well productivity, or well quality, even when normalized for lateral lengths, smack dab in the center of Saudi America, in Midland county, has been going down since 2017.
All that red, Tier 5 stuff down to the SW toward Reagan and Crockett Counties in the remaining location map above is pasture for very skinny goats that will take $150/$15 to make 2:1 ROI's. That's USGS "technically" recoverable la-la land. We'll have to see whos gonna pay to drill that stuff, and where the money is going to come from, before we can count on that for our future hydrocarbon needs.
Well quality, defined by EUR, not the first six or twelve month cumulative production per foot of lateral length, is going down. Unless you are working interest owner in these tight oil wells and want your money back as soon as possible, EUR's are the only thing that should matter to Americans concerned about their oily future. So, I say foul ball on the "equal," apples to apples, Tier 1 to Tier 2 thing. Don't count on it.
Here's a Texas Railroad Commission GIS map of well bores WSW of the city of Midland in Midland County. This is smaller scale look-alike to the remaining well location map, above. There are many HZ well bores shown in this map and many more vertical Spraberry wells drilled on 40 acre spacing decades ago.
Thru 2014, when the HZ play got started in earnest in the Permian, the TRRC says there has been 1.65 G BO and 4.4 TCF of natural gas produced from the Spraberry in the Midland Basin over 70 years. In spite of that, until a decade or so ago the Permian Spraberry trend was often called the "largest uneconomic oilfield in the US." (Texas Bureau Of Economic Geology)
I have no earthly idea, for instance, why FANG paid $1.8 billion dollars for this stuff on the CP to MB margin, right, save that it must be getting really nervous about available drilling locations elsewhere.
When looking at the Permian Basin it is actually two distinct sub basins that must be reviewed; the Midland Basin is on its last wobbly legs.
America's oily future is becoming increasingly dependent on a very gassy, very watery Delaware Basin.