Filloon Updates Chevron Completions -- January 21, 2018

In the article linked below, the most important thing that jumps out at me: 

Operator production improvements have occurred consistently since 2014. This is when operators began to focus in better fracturing near the well bore. 

This tells me exactly what I've thought all along; 500-ft radially from the wellbore is probably the max efficiency for fracking which means increased density of wells in any given drilling unit.

Over at Seeking Alpha.

Well design is driving oil production gains for US E&Ps. Oil prices have improved as world inventories decrease. Improved well design is lowering breakevens, and economic improvements should continue in 2018. Better source rock stimulation has increased oil production per foot. We have not seen this leveling out, which seems to support the hypothesis of further improvements going forward. This may lead to increased US production, but higher prices will be needed to stimulate meaningful growth. Increased production could place a ceiling on oil prices. We think demand will more than offset US production in 2018.

Chevron has a relatively large acreage positions in the Permian. This is important as the Midland and Delaware Wolfcamp will fill much of the supply decreases from current world oil legacy projects.

The Bakken and Eagle Ford will also be involved, but West Texas is currently the best place to be. We pulled 116 horizontal completions done in 2016 and later. 53 laterals were 6,000 feet or less. The graph below plots oil production over the life of each well. Locations that have been online over a shorter period of time are producing much better.

CVX is at the lower end of production improvements when compared to other operators in the Permian. CVX has used more one mile laterals. Production improvements based on feet, have CVX closer to the average.

CVX should do very well in 2018. Operator production improvements have occurred consistently since 2014. This is when operators began to focus in better fracturing near the well bore. It is a change from longer laterals (more feet), to better stimulation (focus on more oil per foot).