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The Longer the Better Club




The Exxon aquisition of Pioneer is done and now its time to make a plan.


Exxon paid $64 large for this big block of acreage in Saudi America and it needs to have a good outing this time out; better, for instance, than the XTO mess and hopefully better than the BOPCO/Bass acquistion in Eddy County where it can't seem to meet production guidance and is now in it's 3rd request for additional time. Its current CEO promised 1 MM BOEPD in 2018, by 2023. Now its 2 MM BOEPD by 2027


This was 2023's promises from the same fella to do better...



And right on schedule, a year later, from the same guy, here is 2024's promises..



Anyway, lets take a look at how 2023 went for Exxon in the Delaware Basin, given this fine-tuned, new frac techology and longer lateral stuff...

Exxon's 2023 IP's were lower in the Delaware than previous years, its 10-12 month decline rates much steeper, and EUR likely much lower.


This is a TRRC GIS map of Exxon's new postion in Saudi America. Click the thingy. If you go to the TRRC GIS website you can see all of Midland Basin on a bigger scale and try and count 3 mile laterals, requiring more that 3 sections, drilled to date. You'll be surprised how few you can find.



A reminder, please, four mile laterals require 3 1/2 to 4 sections of minerals, not two, or three. A little over 83% of all HZ production in this urban-like neighborhood in the Midland Basin comes from just three benches, the Lower Spraberry and Wolfcamp A and B. The correlative interval covering these three benches is only about 1,300 feet thick.


Most of these long laterals are allocation wells, or production sharing wells, a scheme to force pool minerals in Texas where there is no force pooling. Some minerals are good with that, others are not but can't do anything about it. We are on a mission from God in Texas, to drain America first and there is NO statutory law, no Statewide regulatory rule than cannot be broken.


Longer laterals are all about making a quick buck, not maximizing recovery of oil in place. Exxon profits are falling and try as they may, it just can't get to its lofty production guidance. Even, believe it or not, on a BOE basis. With the Pioneer acquisition and its shit in Eddy County, New Mexico, Exxon is set to become the largest natural gas producer in North America.


You you can make a lot of money making stuff up, some $40MM a year, in fact.


Everybody thinks longer is better and everybody wants to get in the club. Even with bolt on acquisitions its still very crowded out there and this fad is not going to last long.


Next year's promise from Spring will be five mile laterals on 660 foot BHL spacing with new, nuclear fusion, single-stage frac'ing techniques, guaranteed to rattle the entire Permian Basin with 6.0 earthquakes. The world needs American tight oil, by God. Lets rock !


12 comentários


Isn't the Russians' discovery within the area covered by the Antarctic Treaty? If so, that's a conglomerate of about a dozen countries committed to preserve the Antarctic. And that includes drilling for oil. If it's within the Argentina Antarctica, that might be a different story.


But anything seems possible--even, I suppose, these crazy four-mile laterals. The fact that this idea is being bantered about is enough to warn us that the end of domestic oil production is almost upon us. But the propaganda machine has worked: most Americans seem to think that there is plenty of oil in the Permian for the future. And there is; it's just being left in the shale.


What a world, indeed!

Curtir

Thanks for all you do Mike!


Curtir

And the water will evaporate quickly at the surface......

Curtir

Ozarkian
Ozarkian
7 days ago

It'll be interesting to see what one of these 4 mile wells cost. The three mile laterals I've worked on have all been shitshow nightmares for everyone on location. My wells were in OK, but I've heard the same from friends unlucky enough to log in the Permian. Keeping the hole clean was the major problem after 2 miles on the 2, 3mile laterals I did in 2021-22. We had 5 pumps on those jobs and were barely able to keep up, They were fun wells to log though, lots of pressure still hiding behind structure in the deep Marietta,

Curtir
Respondendo a

I reckon that extra mile will cost 4X the first mile and achieve SFA in terms of increased production..But that is Exxon through and through. they have to go bigger and better. Last time is was Microsoft that was going to boost production with AI. That failed too. No the longer lateral story and in two years times the production will be flat or even declining, with the Pioneer acquisition. Woods will ride off into the sunset with a nice fat payoff.

Curtir

Very detailed production information as usual Mike. One day business schools will write about how to dismantle an oil company with XOM in mind.

Curtir
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