Oily Stuff

Oxy's wells in Bone Springs benches are still pretty good In Loving County.

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But notice how steep the initial decline is in 2022. Oxy is well known for front loading frac designs and flow backs for cash flow, all of which leads to steeper declines and accelerated decline rates as the well get gets older.  This is becoming more prevalent in the Delaware Basin where EUR's are giving way to money. Oxy has been paying down debt consistently over the past two years, by selling lots of shit, but by front loading Bone Springs wells. 

 

Compare legacy years for OXY wells in Loving County were IP's were much lower but decline rates were much more exponential and hyperbolic. Someday we will be able to see which of these types of business models resulted in higher EURS and/or higher ROI's. 

 

If I were a royalty owner under this tight oil crap I would be livid about reservoir management and short term money in lieu of EUR's. 85-90% of this tight oil will be left behind, immobile, stranded from pressure depletion. Not with my minerals, no sir. 

 

And think about the oil that will be left behind in the Permian that the American consumer will NEVER see, either from exports, or low recovery rates of oil in place. 

 

Money messes people up, big time. Operators, mineral owners, regulators, politicians...nobody can think past next week anymore.