The Permian tight oil production peaked at 5.4 million b/d in January, 2% higher than a year earlier.

Dear Subscriber,

In this week's newsletter, we cover?the latest oil & gas production data from all 47,909 horizontal wells in the Permian (Texas & New Mexico) that started producing from 2001 onward, through January 2024.

We're excited to share with you the recent SPE Workshop presentation by Jon Ludwig. He explored how Machine Learning is revolutionizing the oil and gas A&D sector. Download your copy here >>

Continuing our theme from previous newsletters, our VP of Product Management, Ted Cross, presents two must-reads: "The Impact of Winter Storms" and "Unstoppable New Mexico?"

And if you are tired of spending countless hours cleaning and organizing your upstream data, check out the clip we share of the Energy Bytes Podcast.

[Blog] Permian – Update through January 2024

The Permian tight oil production came in at 5.4 million b/d in January, 2% higher than a year earlier, while natural gas was with 22 Bcf/d even 10% higher. With higher oil prices drilling activity is also picking up again.

See our blog post for more analysis, including well productivity and gas oil ratios

[SPE Presentation] From Data to Deals

Missed Jon Ludwig's insightful presentation at the SPE Workshop Conference? Don't worry! You can now download his presentation here.

The Impact of Winter Storms

In January of this year, a punishing winter storm brought severe temperatures and snowfall across the US, impacting oil and gas production. North Dakota is one of the fastest-reporting states, so we now have well-level production to take a closer look at the impact!

Production in January in North Dakota fell by 200,000 bbl/d on average, right around 15%. This is slightly higher than previous winter weather events in 2023, but still pales in comparison to the big drop during COVID.

The bottom chart here shows the count of horizontal wells inactive for the entire month in North Dakota. You can see it closely matches previous drops in production -- when operators are shutting in wells, the state's production drops! Yes that is obvious, but there are some interesting details.

While production mostly comes from new wells, the shut-ins tend to be older wells. This makes sense as operators focus their winter field efforts at keeping their biggest producers online. COVID is one exception to this, where a large number of new wells also were shut in.

After previous winter events, it can take a full year to bring the wells back online. The Bakken clearly has a seasonal pulse, with something like 700 wells more offline during winter that get restarted over the course of the year.

So what's the outlook? In previous years, production has bounced back quickly after winter weather events, though it's often a two-month process. Activity levels are king, and January surprisingly saw slightly more production starts than December (63 vs. 57), though these were both lower than August's peak of 113.

Setting that all aside, let's give a big thanks to the oilfield workers up in North Dakota keeping things running through crazy winter weather events. I know this Texan would have a hard time with that cold!

Unstoppable New Mexico?

The rig count in New Mexico has been remarkably resilient over the last two years, hovering between 96 and 112 horizontal rigs since early 2022

This is despite wild swings in price: in June 2022, WTI broke $120/bbl, whereas the last few months, it has mostly been in the $70s. The state has also seen post-COVID price inflation and M&A.

Inour previous discussions on this topic, folks have pointed out the large portion of federal land there, in contrast to the Texas side of the Delaware Basin. New Mexico also features some of the best well performance in the Lower 48, making it still profitable to drill even when other areas falter.

The New Mexico Delaware has an interesting mix of operators. EOG reigns supreme, consistently growing production and now operating over 350k bbl/d in the state. But right around 200k bbl/d sits the impressive private Mewbourne alongside Devon. The mix of operator types -- and thus strategies -- may have made the activity levels more resilient, in aggregate.

At right around 1.8 million bbl/d from horizontals, New Mexico produces in the ballpark of Norway and Kazakhstan, putting it in the top 15 globally if it were its own country. It's been a huge boon to the economy of the southwest and to the US consumer. Bravo!

[Podcast] Energy Bytes Podcast

Tired of spending countless hours cleaning and organizing your data?

Novi's got you covered. Our platform preloads public data sources, allowing you to focus on what matters: building accurate models and making informed decisions.

Say hello to simplified data management and streamlined model training.

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/