Zombie Fish
Updated: Jun 10, 2021
Deteriorating salmon are sometimes called zombie fish.[1]
Several years ago when integrated majors like Exxon, Chevron and BP were swimming back up-river to the Permian Basin to join the HZ tight oil fray, and show us all how good they were going to be in shale, I wrote this:
Lets check it all out two years later and see how the spawn is going.
Above, Chevron did its best work in 2018, it appears, and well productivity seems to be falling, like a lot of the rest of the Permian HZ tight oil play. Its wells were on par with other operators in Reeves and Culberson Counties...not better. I am just focusing on the Delaware Basin where it requires around 300K BO to pay back $9MM wells @ $65. Because CVX has good net revenue leases and lots of royalty in their blocks I think its wells might take only about 240-250 K BO to payout at $65; you'd think it would be drilling the snot out of that Delaware stuff. Its not, see below.
By the way, you can click the thingy, top right hand corner to enlarge this shaleprofile.com analytics charts, above and below.
Exxon, on the other hand, does not appear to be keeping up with the Jones.' Its wells appear to be underperforming its independent counterparts in the Delaware Basin by as much as 20-25% or more. Its not doing near as good as Chevron, see below. Its got a lot of its Permian Basin oil eggs in the $6.5 billion, BOPCO (Bass) basket in Eddy County, New Mexico and whoa Nellie, is THAT stuff gassy.
By the way, Exxon is currently No. 7 on the top 10 flaring list in the Permian Basin. I thought it was on a zero flaring pledge?
Everybody in the shale oil biz in New Mexico went into a full blown panic mode in 2020 because so much of Eddy, Lea and Chavez Counties are Fed/BLM leases and Uncle Joe was threatening to shut their drilling permits off.
So they filed a gazillion permits in 2020 in the Delaware Basin, see below.
Exxon, not so many, and/or it is sure not in a hurry to complete them in 2021, see below.
Pretty much as soon as Exxon jumped in to the HZ tight oil play in West Texas, things started going south. Maybe some of that has to do with the fact that its got a bad case of gas in Eddy County and is stinkin' up the place, see below.
Exxon started mouthin' off in 2019 about 1MM BOEPD production from the Permian by 2025...https://www.reuters.com/article/us-exxon-mobil-oil-shale/exxon-raises-output-target-for-top-u-s-shale-field-to-1-million-barrels-per-day-by-2024-idUSKCN1QM1OX. Its been crawfishing on those promises ever since. It's BOD has been hijacked by the ESG crowd and 4Q2020 it lost something like $21 billion from gas reserve impairments associated with the XTO fiasco.
In March of 2019, however, Exxon's Chief Executive Darren Woods said that Exxon would change “the way that game is played” in shale. "Its size and businesses could allow Exxon to earn double-digit percentage returns in the Permian even if oil prices - now above $58 per barrel - crashed to below $35," added Senior Vice President Neil Chapman.
It didn't, and the $60 billion worth of value it said it was going to deliver to shareholders from "taking small independents to school on shale oil development" in the Permian Basin was dung heap. Now its got the SEC on its big blue ass over exaggerating reserves and future performance in a shale oil basin. Imagine that !
You know how to tell when a US, HZ tight oil company is lying?
Whenever it utters the first letter in EUR.
Donna Fernstrom, Reptile keeper and breeder, wildlife observation and ecology hobbyist.
"These animals literally fall apart at the end. Their immune systems are no longer working properly, their metabolism’s crashed, their organs have stopped functioning, and they are already mostly dead. They’re just waiting for their brain to catch up to that fact."
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