Eagle Ford – update until 2016-05


This presentation contains the latest oil production data from 17986 horizontal wells in the Eagle Ford region, until May, based on the latest production data from the Texas RRC. Of these wells, 15915 where located in the Eagle Ford formation, and all of them started production since 2010.

We can see that total oil production in the Eagle Ford continuous to drop, and faster than last year. Based on preliminary data, I see that in May 92 new wells were brought online vs 68 in April. Due to typical large revisions in the Texas data, I expect that the total production shown here for May ( 1.12 mbo/d) will be still revised upwards by at least 10%, and that recent declines will eventually turn out to be of a magnitude of around 20-30 kbo/d, per month.

This is of a similar size as what we’ve seen in North Dakota, where fewer wells are brought online, but where wells also decline less than in the other basins.

If you switch to gas, you’ll see that the drop in production is much lower.

I introduced a new way to group the total production shown here. If you click on the “Group production by” selection, and choose “Production level”, you’ll see total production grouped by the level of production of each well, during a particular month.

If you do this, you’ll see that in May 2016, less than half of the oil production (around 500 kbo/d) came from wells that produced less than 100 bo/d. By turning to the the “Well Status” tab, you’ll see in the bottom graph that more than 80% of all wells are in this group (<100 bo/d).

This is a general finding in shale oil & gas production: most production comes from a small portion of wells, typically young ones, that have a high production rate.

On the first tab (“Where is the Eagle Ford?”), it is interesting to see that most oil is produced around Karnes county, while gas production is more focused in the southwest of the region (switch product to “Gas” to see this).

In the “Well Quality” tab, we can see the performance of wells since 2012, and I’ve grouped them by the quarter in which they started production. Results are shown in a semi-log plot to reveal better what happens over time.

We can see that initial production has improved since the 2nd half of 2015, which coincides with an overall reduction in completions. Most improvements are in the initial 10 months on production, while the average behavior of wells after this period hasn’t changed much.

EOG is the largest oil producer in the Eagle Ford, as measured by total production (see “Top Operators” tab). If you select only EOG using the “operator” filter, you’ll see that recently EOG wells have increased in performance, on average, in the first few months of production.

I was wondering whether this improvement stems from improvements in well design, or because EOG has focused more on the core areas. To analyze this, I first checked in which counties EOG has its best wells.

EOGs best wells are in Karnes, Gonzales & De Witt. You can see this if you group the EOG wells by “County”. I skip Lavaca, as just a few wells were drilled there.

If we then filter on only those 3 counties, and we group wells by “Quarter of first flow”, we can see that the improvement over time is less than we just saw before. This suggest that an important factor in the recent average improvement has been a reduction in new completions outside these 3 counties.

We can verify this in the next tab “Well Status”:

By selecting EOG, and those 3 counties, and filtering on status “3. First flow”. Now we can see that EOG has reduced completions in those 3 counties, but far less than its overall reduction in completions, which you can find by comparing the results when emptying the county filter.

On Friday, September 2nd, I plan another update on the Permian, followed a few days later with a post on all shale regions in the US.

 

====BRIEF MANUAL====

The above presentation has many interactive features:

  • You can click through the blocks on the top to see the slides.
  • Each slide has filters that can be set, e.g. to select individual or groups of operators. You can first click “all” to deselect all items. You have to click the “apply” button at the bottom to enforce the changes. After that, click anywhere on the presentation.
  • Tooltips are shown by just hovering the mouse over parts of the presentation.
  • You can move the map around, and zoom in/out.
  • By clicking on the legend you can highlight selected items, and include or exclude categories.
  • Note that filters have to be set for each tab separately.
  • The operator who currently owns the well is designated by “operator (current)”. The operator who operated a well in a past month is designated by “operator (actual)”. This distinction is useful when the ownership of a well changed over time.
  • If you have any questions on how to use the interactivity, or how to analyze specific questions, please don’t hesitate to ask.

North Dakota – update until 2016-06


Total oil production in North Dakota decreased by 20 kbo/d to 1027 kbo/d in June, after a small increase (5 kbo/d) the previous month. I expect that we will see a few more months of similar decline rates (although there can be big monthly variations), given the low number of new completions.

Some observations:

  • 43 wells started flowing in June, compared with 45 in May.
  • Although I mentioned during my last update, that well performance in North Dakota, as a whole, is still improving, this observation did not consider that fewer wells are brought online since 2015. If we look at the performance of the top 100, or top 1000 wells in 2015 vs 2014, as measured by the cumulative oil return in the first 7 calendar months (which is all the data we have for all 2015 wells), then there is actually a small decline in performance. I found this quite surprising, as I expected to see some improvement from the larger fracs.

What is new this time is the ability to see the well performance of individual wells. If you go to the “Well quality” tab, you will see a new filter “Well name”, which shows all the well names, and their API numbers. I recommend first using the other filters to narrow down the selection, and then using this filter to see the performance of individual wells. If you only have the API number of a well you want to see, you can enter this into the search box of the filter.

I used this new feature to analyze the performance of old individual 2006-2007 wells. I was surprised to see how often there appear to be well interventions during the lifetime of a well. This new filter may also help in determining decline rates for wells late in life, as it allows you to filter out those wells that have had large interventions (e.g. refracs).

This feature also allows you much easier to verify the data that I show in these presentations with any production data you are familiar with. For North Dakota, I use the production data from the monthly NDIC production reports, so if you encounter a difference, then please first check this with the relevant monthly report.

Another small change is in the “Well Status” tab. I saw that there was some confusion on the meaning of the well status “Spud”, as some people thought this status applied only to the month in which the well was spud, but I used it also for all months after that, until first production. I’ve now split this status, into “1. Spud”, which only holds for the month in which the well was spud, and “2. DUC”, for all following months until production is started.

Note that the typical meaning of a DUC well is that it is already completely drilled, but as I don’t have this information, I assign a well to this status already after it is spud.

This change also makes it easier to compare the number of new well spuds, and the number of new wells that are on production for the first time (“3. First flow”).

On Sunday August 28th, I plan another update on the Eagle Ford.

====BRIEF MANUAL====

The above presentation has many interactive features:

  • You can click through the blocks on the top to see the slides.
  • Each slide has filters that can be set, e.g. to select individual or groups of operators. You can first click “all” to deselect all items. You have to click the “apply” button at the bottom to enforce the changes. After that, click anywhere on the presentation.
  • Tooltips are shown by just hovering the mouse over parts of the presentation.
  • You can move the map around, and zoom in/out.
  • By clicking on the legend you can highlight selected items, and include or exclude categories.
  • Note that filters have to be set for each tab separately.
  • The operator who currently owns the well is designated by “operator (current)”. The operator who operated a well in a past month is designated by “operator (actual)”. This distinction is useful when the ownership of a well changed over time.
  • If you have any questions on how to use the interactivity, or how to analyze specific questions, please don’t hesitate to ask.