Can Any Haynesville Operators Make a Decent Return at Sub-$2 Gas?

Dear Subscriber,

Welcome to another edition of our newsletter! We're thrilled to share with you our latest blog post of the Haynesville Pulse, where Brandon Myers, goes into how operators are navigating sub-$2 gas prices.

Also, we're back with another episode of the Weekly Workflow with Scott Iceton. Join Scott as he examines Apache's spacing and completion design in SW Midland County to understand capital efficiency.

And that's not all! We're thrilled to share that our team members, Jon Ludwig and Kiran Sathaye, will be presenting at the SPE Workshop titled "Well Completions for Unconventional Resource Development Optimization and Parent-Child Interaction". Don't forget to mark your calendars for April 15th.

Expanding on the theme from previous weekly newsletters, our VP of Product Management, Ted Cross, has crafted two must-reads: "Well Performance Falling in the Permian?" and "The Scale of Shale"

Additionally, don't miss the summarized version of our blog post: Public Data Models: Better Than Anyone Expected

[Blog] Drilling Into Oblivion: Can Any Haynesville Operators Make a Decent Return at Sub-$2 Gas?

Gas prices are plummeting, but can Haynesville operators weather the storm?

Our latest blog post reveals the top ten operators' breakeven points and the implications for the industry.

[Weekly Workflow] Spacing and Completion Design

Curious about Apache's success in SW Midland County?

Join Scott in the Weekly Workflow, where he looks at the spacing and completion design of Apache to understand capital efficiency.

Well Performance Falling in the Permian?

What’s going on with well performance in the Permian? With more and more data rolling in for 2023, we’re able to paint a better picture of how the performance trends have continued since the significant drop in 2022.

For this analysis, we're comparing per-well production for wells starting in 2019 and wells starting in 2023. By going back to 2019, we remove some of the COVID-era noise, when operators dramatically cut back on their developments. We find a per-foot production drop ranging from -12% for Eddy County down to -20% for Lea County, with Midland and Martin Counties coming in at -15% and -13%. These numbers represent the average 6-month cumulative oil production for wells in that cohort, normalized to a 10,000’ lateral.

Lea County, in particular, is worth focusing on as it produces by far the most of any county in the country, clocking in right around 1 million barrels a day. With that volume of production, any decline in per-well performance is worth examining. Interestingly, lateral lengths have not changed significantly over the past few years there, with operators drilling an average of 8,408’ in 2021 and 8,515’ so far in 2023. Proppant intensity has fallen around 10%, combined with some operators drilling fringier acreage and more parent-child relationships to deal with.

Very interesting trends worth keeping an eye on. Of course, six months of production is not illustrative of the full lifetime well performance, but so far it has held up pretty well as a metric.

[Podcast] Data Evolution in the Energy

Our founder and president, Jon Ludwig, is a featured guest on the latest episode of the Wicked Energy podcast! Tune in as Jon dives into the future of the energy industry, covering topics like innovation, capital, and much more. Don’t miss out on this enlightening discussion!

The Scale of Shale

Every now and then we have to pinch ourselves about just how much oil and gas has been produced from unconventional reservoirs. Truly earth-shaking numbers here: over 25 billion barrels of oil plus over 300 trillion cubic feet of gas (!!!!)

Looking at the data, Appalachia and the Permian stand clearly above the rest on energy produced; with the Permian over 10 billion barrels produced and over 16 billion barrels equivalent; Appalachia is just slightly ahead but that’s over 90% gas, with much lower value.

For anyone who used to work conventional exploration, these numbers are almost hard to believe. For context, the greatest conventional exploration success of the last decade–Guyana’s Stabroek block–currently contains 11 billion barrels of recoverable reserves across its many discoveries. Of course, the economics of the deepwater are very different than shale, but imagine the reaction if those fields were found today offshore Texas!

A few other interesting comparison points: the East Texas oil field, the largest in the L48, produced over 5 billion barrels. Prudhoe Bay, the largest in the US, has produced over 12 billion barrels, and Mexico’s largest field Cantarell has produced over 13 billion. So the Permian is coming for North America’s top field crown!

This chart also reveals some interesting product mix differences. The Williston–despite being the first major shale play developed–has a 77% oil cut, with the Powder River and Permian coming in next at 66% and 62%, respectively. The Eagle Ford and DJ are just above 50% oil cut, with that number expected to drop with time as the wells become naturally gassier with age.

With this type of context, you really appreciate the impact of hydraulic fracturing and horizontal drilling technology. Without these unconventional fields, we’d be in a world of hurt!

[PDF] Public vs. Private Training Data in Oil & Gas Forecasting

Curious about the disparity between private daily data and public allocated data in forecasting models?

Dive into the PDF below for the answer.

[SPE Workshop] Well Completions for Unconventional Resource Development Optimization and Parent-Child Interaction

Get ready to mark your calendars because something huge is on the horizon!

The SPE Workshop Conference is just around the corner, where our experts Jon Ludwig and Kiran Sathaye will be taking the stage. Jon will delve into the world of A&D in oil & gas, while Kiran will unravel the complexities of completions, spacing, and depletion in the Midland and Delaware Basins.

Ready to see what’s under the hood and how Novi Labs can help you get valuable insights?

Book your personalized demo with our team: https://novilabs.com/request-for-demo/