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 !