This chart is one the many negative ramifications of the US tight oil phenomena. It's short term investment cycle sucked capital away from conventional exploration, onshore and off, and the entire domestic oil industry in America now focuses entirely on drilling $10MM Wolfcamp wells for 200% rates of return. Legacy tight oil production declines on an annualized basis of about 5 MM BOPD so that sector has to stay on the hamster wheel, running flat out, just to stay even.
Gone is the era in America where we drilled actual reservoirs that would produce 15 times the amount of oil required to pay back drilling and completion costs and we are now left with shit that declines 85% the first 32 months of production life. And THAT was the good stuff we were drilling, the Tier 1 stuff in the Bakken, Eagle Ford and Permian, the cores of the cores.
What happens when those cores are drilled UP and gassed out? Well, it's already happening, even in the Permian Basin.
There is a shit storm coming. Ignore the anti-peak oil wankers who laugh at the theory that world production rates will someday not meet demand. WE ARE THERE.
And ignore the idiots who make stupid stuff up about the future of oil in America based on past performance. AS though nothing ever changes, it always stays the same. They want you to believe we have 25-45 more years of Permian tight oil left and don't need to conserve, or curtail exports...WE ARE PAST THAT.