Michael Filloon's Bakken Update -- October 16, 2015

Over at Seeking Alpha.

• The Permian Basin continues to be the top US unconventional play in the United States, with the Delaware Basin providing returns much like the Midland Basin.
• Matador is levered to the Delaware basin, providing unique exposure compared to other small and mid-cap publicly traded companies.
• Early Matador results in the Permian seem to point to positive economics at today's oil price.
• Matador well design continues to impress, using large volumes of sand and fluids per foot with tight frac cluster spacing.
• Matador's Delaware acreage is upside as the very thick source rock and multiple economic intervals are perfect for pad drilling. 

The article has an incredible amount of information as usual. This is simply the piece about the geography and stratigraphy of the Permian. 

Filloon:

When looking at specific core US unconventional plays, the Permian may have an advantage. This Basin is split into three very different basins: the Midland (to the east); the Central Basin; and, the Delaware (to the west).

(Source: Drillinginfo)

Filloon:

The Midland Basin is in the east. The central basin platform is wedged between Midland and the Delaware Basin. Midland is better known, and has seen more traffic. The Delaware Basin is less known, but could be equally important.

Delaware development occurred after Midland, so we are just beginning to see its upside. It shares some things with Midland like a very thick payzone and the Wolfcamp, but it's most important factor could be from something unique.

Filloon:

The Midland Basin gross payzone is approximately 4000 feet. The Wolfberry has been an unconventional vertical target started before horizontal techniques began. The Spraberry and Wolfcamp are the main horizontal targets in Midland.

(Source: Geological Data Services)

Filloon:

The map above provides a comparison, and the Delaware Basin has deeper intervals. This means a couple of things. Well costs will be greater. It also means well pressures could be higher. Higher pressures generally provide more resource, as it is propelled at a greater rate up and out of the wellbore.

Filloon:

Both the Midland and Delaware basins share the Wolfcamp, but the latter has Bone Spring upside.

Go to the linked article at Seeking Alpha for the analysis, a lot more data, and the ability to enlarge these maps.