My goal on Oily Stuff is awareness. I care deeply about the hydrocarbon future of my country. The amazing tight oil resources we have left in West Texas and New Mexico are being so grossly mismanaged by corporate greed and regulatory ineptness it is all going to be gone before we know it.
We've shown you repeatedly on OSB how well productivity in the Delaware Basin is declining in the four key counties of the Basin, Lea, Eddy, Loving and Reeves. Forget the IP12 and 24 month rush to cash flow dung heap; EUR's are all that matter and they are going DOWN.
As the entire sub-basin becomes gassier, the Texas side, in Loving and Reeves, "liquids" production is falling. If it were not for Lea and Eddy Counties in New Mexico, the entire Delaware Basin would be declining in liquids production.
Associated gas, however, is soaring.
Lea and Eddy Counties have over 65 rigs running in them and it is being carpet bombed with Bone Springs wells. The biggest operator in Lea County, EOG, drilled its best wells in 2017 and its down hill ever since. Gassy oil wells are turning into oily gas wells in New Mexico and total gas volumes are going to the moon.
Depletion is a bitch. It happens all the time, everywhere. The idea it will never happen in the Permian is dumb. We've touched on what all this gas is doing to liquids production, but not too much about liquids quality. My landman friend from Midland sent me this a few days ago, so I am going to let this fella Henrich Leopold take over from here. He a chemical engineer from somewhere in Europe and posts on social media regularly about refinery related matters....
Henrich is correct, I checked the level of +50 API production in New Mexico from two sources. I concur with his opinions, thank John for sending this stuff to me, and thank Mr. Leopold for allowing me to steal it.
Americans are being lied to constantly by the API, IPAA, TXOGA and other oil lobbyists. More American 'VERY LIGHT' tight oil being that is being exported to our so called "allies" around the world does little to increase US national energy security. Exports are all about money. Most of this liquids stuff from the largest tight oil basin in the US is now getting so light its not benefitting anybody. But exporting the stuff is hurting the United States. We're wasting flared gas, valuable ground water to frac the shit with, pressure depleting reservoirs and all of that is driving product prices down killing domestic AND international investment in our future. Sound familiar?
We can't use valuable hydrocarbon resources in the US all at once, at a rate that makes greedy corporations in America more money, as fast as they want to make it, but we WILL be able to use it someday in the future. The problem with that is that it will be pissed away, flared and exported, by the time we need it.