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Permian Basin 2017

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PERMIAN BASIN: PRODUCTION FORECAST 74 | November 2017 | hartenergy.com exercise that can change significantly depending on whether evaluators look at today's economics, forward strip, possible upwards revisions in OFS opex costs, or strictly follow SEC guidelines. With the Permian being the focus of the majority of A&D activ- ity over the past few years we have now seen acreage costs in some areas rise above the $50,000 per acre and minerals sell for over $200,000 per acre. For this to be sustained new benches have to be delineated and pro- duction rates/recover- ies must continue to improve. Figures 5 and 6 show the average pro- duction for each basin over the past few years. Notice that the Dela- ware has increased pro- duction on average by 47% from 2014 to cur- rent, while the Midland Basin has increased production on average by 70%. Peak rates are lower on the Midland Basin side, but that is due to the higher GOR we are seeing on the Delaware side. Both basins are showing nearly uni- form 6-month decline rates, allowing us to believe that EURs are growing larger as well. Perforated interval lengths, however, have not changed tremen- dously over the past few years, on average. The upper quartiles are beginning to be skewed up and we are seeing longer tails with longer laterals being drilled by operators. The Delaware Basin, on average, is seeing perf intervals of approxi- FIGURE 4. Detring Price Per Acre Across All Basins FIGURE 5. Delaware Basin Vintage Type Curve

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