Long Laterals: How Do They Compare in the Permian?

Dear Subscriber,

This week, we analyze why operators are drilling longer wells than ever in the Permian Basin. Our data shows that while these 3-mile laterals initially lag in per-foot production, they make up for it over time—challenging conventional wisdom about optimal well length.

Explore the detailed analysis by Ted Cross, our VP of Product Management, below.

In this week's newsletter, we also share:

• A research report on the Diamondback-TRP asset swap: The Vermejo asset's oil production has declined ~45% from its peak, while TRP's Midland production has surged ~350% year-over-year. Diamondback's asset swap isn't just about location—it's about capitalizing on production trajectories.
• PDF summarizing our URTeC technical paper "Deriving Time-Dependent Scaling Factors for Completions Parameters in the Williston Basin using a Multi-Target Machine Learning Model and Shap Values". This study uses machine learning to provide time-dependent scaling factors for proppant, fluid, and spacing, leading to more precise production models and smarter economic decisions.
• Join us for the upcoming SPE DSEATS event, where Dillon Niederhut, Head of Data Science at Novi Labs, will explain how causal inference helps us pinpoint the factors that truly drive success.
• A clip where Ted Cross explains how Novi helps operators easily build and train models to answer critical questions.
• We're growing rapidly and expanding across multiple departments. Visit our careers page to explore the eight current job openings.

Enjoy the read!

Permian Basin Long Laterals

Long laterals are more important than ever in the Permian Basin, with 25% of Midland Basin wells and 8% of Delaware Basin wells reaching three miles (or longer). How are these long wells producing compared to shorter laterals?

My top plot shows the average normalized production rates over time, grouped by lateral length. The light red comprises wells less than 2 miles, the medium red is 2 milers, and black is 3 milers or longer (for exact cutoffs, see the footnotes).

Each line is normalized by the production rate per foot, adjusted to a 10,000 foot lateral. In other words, this removes the obvious effect of the longer laterals having more reservoir to produce. Looking at the production curves in this way, the long laterals produce less per foot in early time, but the gap narrows up later in the wells life. This effect is more exaggerated in the Midland Basin.

Functionally, this translates to lower IPs (per foot) and shallower decline for 3+ milers. Keep this in mind as you interpret early-time productivity trends!

The middle chart shows cumulative degradation of 3+ milers vs. 2 milers measured at different time intervals. Wells are grouped by Novi's Rock Quality Tiers. A couple observations:

• In both subbasins, higher-quality rock has less per-foot degradation than lower-quality rock.
• In both subbasins, but especially in Midland, early-time degradation is more than later time.
• These metrics are noisy due to small well counts, but 24-month cums show between 4% and 10% per-foot degradation for Tier 1/2 rock.

Per-foot degradation this low translates into strong economics for longer laterals, reflected in the rapid growth of long laterals in the Permian (bottom chart). Here, the Midland dominates the Delaware. ExxonMobil leads the way, with 135 long laterals drilled in 2024. Note that the Midland Basin is significantly more consolidated than the Delaware, giving more contiguous acreage for extended laterals.

Increased lateral length has been a major driver of improved per-well productivity and drilling efficiency numbers that have driven solid 2024 production. With 4-mile tests now coming online, extended laterals are more important than ever in the Permian.

What's Behind the Diamondback-TRP Asset Swap?

The Vermejo asset’s oil production has declined by ~45% since its peak, while TRP's Midland production has skyrocketed an impressive ~350% year-over-year. Diamondback's asset swap isn’t just about location, it’s about leveraging production trajectory.

Get all our insights in the Diamondback–TRP Asset Swap Novi Intelligence report here.

Expanding Machine Learning Models for Better Production Forecasting in Emerging Shale Basins

Traditional scaling methods fall short when it comes to capturing evolving well dynamics. This study uses machine learning to provide time-dependent scaling factors for proppant, fluid, and spacing, leading to more precise production models and smarter economic decisions.

Download the full technical paper

SPE Data Science and Engineering Analytics Technical Section

On December 11th, Dillon Niederhut, Head of Data Science at Novi Labs, will dive into the fascinating world of causal inference.

Learn how to identify the true variables influencing outcomes and make smarter decisions that can save millions. From reservoir management to production optimization, Dillon will share real-world examples to show how causal inference transforms petroleum engineering. Don’t miss out, register now!

Simplifying Model Training For Oil & Gas Operators

Skip the data prep headaches. Novi comes fully loaded - the upstream data, the AI models, everything you need to answer critical business questions about your focus area.

Current Job Openings

We're growing rapidly and expanding our team across multiple departments. Visit our careers page to explore the seven job openings available.

- Data Engineering Manager - US Remote

We are seeking an experienced and dynamic Data Engineering Manager to lead our growing data team. In this role, you will oversee the architecture, development, and deployment of our foundational data product while fostering collaboration and driving impactful results.

- Senior Data Scientist - US Remote

We are seeking a skilled and innovative Senior Data Scientist to join our team. In this role, you'll design and implement data-driven solutions, collaborate with SMEs, and drive impactful results through cutting-edge machine learning and analytics.

- Customer Success Advisor - US Remote

We are seeking a dedicated and dynamic Customer Success Advisor to help clients maximize the value of Novi's data analytics solutions. In this role, you'll drive user adoption, deliver tailored training, and collaborate across teams to ensure exceptional customer experiences and impactful results.

- Account Exectuive - Remote / Austin TX

We’re hiring an Account Executive to drive growth at Novi Labs. If you’re a self-starter with a proven track record in SaaS sales and love a collaborative work environment, this could be your next big move!

- Senior Data Engineer - The Netherlands (Rotterdam)

We are seeking a skilled and passionate Senior Data Engineer to join our dynamic team. In this role, you will be responsible for building, expanding and optimizing data pipelines.

- Senior/Principal Analyst - Austin / Remote (North America)

As an analyst at Novi, you will be at the forefront of revolutionizing how operators and inventory are valued. Leveraging our advanced upstream data, cutting-edge inventory models, and machine learning tools, you will help pave the way to a new, more accurate method of benchmarking energy companies and forecasting future energy supply

- Senior Software Engineer (Python) - Remote / Austin TX

Novi Labs is looking for an experienced Senior Software Engineer with a passion for systems thinking and careful design. This role is for an engineer to support and further develop our market-leading machine learning platform for forecasting and optimization.

- Senior Java/Full-stack Engineer - US Remote

We are in search of a seasoned Java engineer that has a passion for sound design and engineering practices and is adept at making reasoned short-term vs long-term trade-offs.

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-a-demo/