Thanks ckilmer.
thackney, I put the question below on the Permian basin to EERinOK who sounded knowledgeable.
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Maybe you know the answer to this question.
Why is that production is not just exploding in the Permian basin.
There are so many stacked pay streaks one on top of the other that you would think they would be able to zoom up volumes and push down costs fairly rapidly. That sure is the case in the Baaken where they have a third the number of pay formations. But its not happening in the permian. costs remain high and volumes move up only incrementally.
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I am not certain since I don’t work the Permain, but did just read an interesting article in Jour. Petroleum Technology about it.
the Permian is legacy oilfields, land positions are established and there is far less land competition since leases are held by production. so no rush by 100s of operators from majors to mom and pops, to punch a 1000 holes in the next 1-2 years.
operators are taking a slower measured approach to locate the best of many geographic and stratigraphic targets. in a sense still exploratory, not large scale development yet.
another reason that might have to take a more diligent quality over quantity approach is that it is oil in the rock, not gas with 50 times gas viscosity in low permeability. a bust well is true bust, total loss. at least in the gas shales and eagleford there is some gas cash flow even on marginal wells.
once the geology is better understood, identifying where the permeability is located, it could go nuts like the eagleford & bakken. a lot of the horizontal activity is on the basin fringes, not in existing 50-60 year old depleted fields, so again, today it seems more exploratory rather than field development phase.