Locator: 49316PERMIAN.
Locator: 49316AI.
Locator: 49316TEXAS.
Locator: 49316ELECTRICITY.
Texas shale needs a lifeline: it may be AI. Link here. Archived.
Note: to extended family members only. Not meant for any other readers.
I have not read the linked article very closely; will re-read it again tomorrow. But Diamondback / Venom mentioned throughout the article. I've been accumulating shares in Venom for the past two years. Diamondback/Venom is the face of the Permian. When I opened a position in Venom, I used cash from one or two other energy plays to close out those positions. I consider VNOM a $40-stock. If I can get it for less than $40, wow! P/E of eleven. Pays 6.28%. My dad's kind of mom-and-pop retail stock. CVX, p/e 20; pays 4.3%; XOM, p/e 16; pays 3.46%. My wife gets 3 - 4% on government bonds.
Tickers:
Diamondback Energy (FANG is the operator; it needed a company to find and acquire -- it bought Viper:
Reposting:
Locator: 49153PERMIAN.
RBN Energy: the sour-gas-related infrastructure of the booming northern Delaware Basin. Archived.
The numbers out of Eddy and Lea counties in southeastern New Mexico are
nothing short of staggering. Crude oil production at 2.3 MMb/d, or one-sixth of total U.S. output.
Natural gas production north of 9 Bcf/d and rising fast. More than 90
active rigs — again, one-sixth of the U.S. total.
Many
top E&Ps are
stoked about the Northern Delaware Basin because of its stacked benches
of high-quality, crude-saturated shale and carbonate formations. But
much of the associated gas emerging from wells in Lea County is
“off-spec” — tainted by levels of hydrogen sulfide (H2S) and carbon
dioxide (CO2) that need to be dealt with — and producers and
midstreamers have been
scrambling to develop the sour-gas-related infrastructure required to
support production growth.
In today’s RBN blog, we begin a detailed look
at the Northern Delaware’s existing and planned infrastructure for
handling sour gas, including special gas gathering systems, amine
treatment facilities, acid gas injection (AGI) wells, sweet gas
pipelines and processing plants.
t
wouldn’t be an exaggeration to say that New Mexico’s Eddy and Lea
counties are now the epicenter of U.S. hydrocarbon production. As the
Energy Information Administration (EIA) recently pointed out, the
side-by-side counties (total population ~140,000) accounted for an
astounding 52% of total U.S. crude oil production growth from 2020 to
2024 — a nearly 1 MMb/d increase in only four years (mustard-brown layer
and bar segments in Figure 1 below). Lea County alone produced an
average of 1.2 MMb/d of crude and 4.3 Bcf/d of gas in June, according to
ShaleXP, and Eddy’s output (a little gassier) averaged about 900 Mb/d
and 5 Bcf/d. Eight counties on the Texas side of the Permian — six in
the Midland Basin and two in the Delaware — accounted for another 40%
(or ~760 MMb/d) of the 2020-24 gain in total U.S. crude production
(burgundy and red layers and bar segments).
Figure 1. Eddy and Lea Counties’ Shares of U.S. Crude Oil Production and Production Growth.
Source: EIA
Not for nothing did Eddy and Lea take center stage. Instead, over the
past several years a handful of Permian producers — EOG Resources,
Devon Energy, Mewbourne Oil, Occidental Petroleum and Matador Resources
among them — (1) came to understand just how much crude oil was trapped
within the thousands of vertical feet of shale and carbonate formations
in the Northern Delaware and (2) perfected the drilling-and-completion
techniques to free that crude (and lots of NGLs-rich associated gas) in
an increasingly systematic, efficient and economic manner. Nowadays,
it’s common for newly completed horizontal wells in the two counties to
produce between 60 Mbbl and 120 Mbbl of crude oil in their first 30 days
of operation, and for multi-well pads to produce several hundred
thousand barrels a month.
ChatGPT prompt: Oil. Permian. Delaware Basin. Is FANG / VNOM located across the Delaware
Basin or more prominently in either the norther Delaware Basin or the
southern Delaware Basin?
ChatGPT reply:
- FANG (Diamondback) is more prominently in
the Southern Delaware Basin when it comes to its core development
acreage. Their big, operated acquisitions and development are focused in
counties like Reeves & Ward and other southern Texas Delaware
areas.
- VNOM (Viper) has a royalty / minerals footprint that is more spread
out, covering both southern and more northern acreage. But don’t think
of them as having “core operated development” (drilling, completions) as
much in the northern Delaware as some operators do; their strength is
royalty exposure over a broad area.
**********************************
Disclaimer
Brief
Reminder
Briefly:
- I am
inappropriately exuberant about the Bakken and I am often well out front
of my headlights. I am often appropriately accused of hyperbole when it
comes to the Bakken.
- I am inappropriately exuberant about the US economy and the US market.
- I am also inappropriately exuberant about all things Apple.
- See disclaimer. This is not an investment site.
- Disclaimer:
this is not an investment site. Do not make any investment, financial,
job, career, travel, or relationship decisions based on what you read
here or think you may have read here.
- All my posts are done quickly:
there will be content and typographical errors. If something appears wrong, it probably is. Feel free to fact check everything.
- If anything on any of my
posts is important to you, go to the source. If/when I find
typographical / content errors, I will correct them.
- Many posts are not proofread for several days after they've been posted.
- Reminder: I am inappropriately exuberant about the Bakken, US economy, and the US market.
- I am also inappropriately exuberant about all things Apple.
- And
now, Nvidia, also. I am also inappropriately exuberant about all things
Nvidia. Nvidia is a metonym for AI and/or the sixth industrial
revolution.
- I've now added Broadcom to the disclaimer. I am also inappropriately exuberant about all things Broadcom.
- And Oracle.
- Longer version here.
