Filloon over at SeekingAlpha: monster Delaware wells provide insight into longer term implications for the USO.
- the Delaware has more upside than any unconventional play in the lower 48
- the Delaware is deeper than Midland, and this provide unique well pressures in Loving and Lea counties
- these results are why Suntrust loves this area
- we are just starting to figure out how good the Delaware is, and how far reaching the play will become
From the article:
Well results show much better production at the high end of the curve.
As in all plays, some wells grossly under perform.
More importantly, is
the very large oil production on the high end.
We focused on locations
using more than 10 million pounds of proppant and/or more than 1,000
pounds per foot. This seems to be a base case or low end of enhanced
completions. It also provided inclusion of wells that have a shorter
lateral length.
Only wells completed after October of 2015 were
included. The slide above has four locations producing more than 500
KBO. These wells had a well life of 9 to 13 months. These are better
than most anywhere, and seem to be isolated to EOG. Nine locations
produced more than 400 KBO. 28 wells produced more than 300 KBO. The
total enhanced completions within this time frame were 311.
Summary:
In summary, the Delaware has seen less activity than most other US
unconventional plays. Operators continue to increase spending in the
Delaware. There is more de-risking and downspacing to assess. This
increased risk could provide more up or downside.
Recent results show
there could be something special in the Delaware, and we do not know
which intervals and how large an area it encompasses. Although oil
prices may remain low, the Delaware should continue to increase
production. We believe the Delaware is one of the best areas to be.
Concho, EOG, and Cimarex are just a few names that seem well placed
going forward.
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