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This might be, or will eventually get, behind a paywall so the article is copied below. I've communicated with Collin Eaton at the WSJ; he's a sharp cookie and understands what's going on. All the horse dookey about there being no CAPEX money, greedy investors wanting their money back (the bastards), labor shortages, pipe and supply chain shortage, Biden (the meathead) is not sympathetic with the oil business, won't issue Federal drilling permits, the EPA is overreaching on methane regulations...all that is a little true, most of it not.

Things are slowing down in the mighty Permian Basin because it is over drilled, pressure depleted and gassy oil wells are turning into oily gas wells. Well quality is going down and those dudes are slowing down because they are scared to death of drilling themselves out of business. Exporting 70+ % of Permian tight oil production knowing all this, while draining the SPR is treason.  Producers, exporters, regulators and politicians that allow it are all guilty.
 
By the way, 5-6 years of drilling inventory is high by two years. 
 
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Dozens of small drillers helped fuel a resurgence in the busiest U.S. oil patch over the past two years. But they tapped many of their best drilling spots, and will have to ease their rapid pace of drilling as their inventory shrinks, analysts and executives say.

Private oil companies in the Permian Basin of West Texas and New Mexico emerged from the pandemic-induced oil downturn last year as a growth engine for U.S. shale, now running almost half of the working drilling rigs there, up from a quarter before the pandemic. Their publicly traded rivals are restrained by shareholders pushing for conservative spending and using leftover cash to pay investors and reduce debt.

After growing rapidly, most smaller producers now have, on average, around six years of drilling locations that could generate returns at low prices, according to data provided to The Wall Street Journal by energy analytics firm Enverus Inc. Energy executives say those limitations will likely lead them to slow their drilling.

“Can private companies maintain this pace indefinitely? The answer is no,” said James Walter, co-chief executive of publicly listed Permian Resources Corp., PR -2.89%▼ a new company formed by the combination of Colgate Energy Partners III LLC and Centennial Resource Development Inc. “There’s just not enough companies of scale, with enough quality inventory.”

The constraints will likely lead many private producers to level out activity or sell themselves to larger companies that would temper their growth, executives and analysts say. A pullback could crimp overall U.S. oil production. Private producers hold around one-fifth of the Permian’s most valuable acreage, analysts say.

Private oil producers hold roughly one-fifth of the Permian’s most valuable acreage, according to analysts.

Some private drillers said the Enverus inventory data was overly conservative but largely didn’t dispute that private companies lack the assets to keep growing rapidly. Some said supply-chain constraints and financial considerations were the main reasons they are slowing Permian drilling, not inventory. The Wall Street Journal reported earlier this year that drilling inventory limitations have also made larger shale companies hesitant to return to their rapid, pre-pandemic growth.

The Permian’s crop of private oil producers is already showing signs of restraint. Despite oil topping $120 a barrel this year, they have dispatched about 22 new rigs since December, compared with last year’s deployment of 86 new rigs, according to Enverus. They have added just four since May, and are expected to maintain or reduce activity in the region next year, analysts said.

“They can’t be depended on long-term to fuel U.S. and global oil-production growth,” said Stephen Sagriff, an Enverus analyst. The number of rigs working in the Permian has recently declined by eight since a two-year peak in late July to 343, according to oil-field services company Baker Hughes Co. BKR 0.29%▲

 

The Energy Information Administration’s monthly data show Texas and New Mexico oil production in June—the latest month for which data was available—rose 2.1% from December. The EIA has lowered its forecast to 690,000 barrels a day of growth this year. If private drillers continue slowing, U.S. oil output could come in hundreds of thousands of barrels a day below expectations, analysts said.

Mike Oestmann, CEO of private-equity-backed Tall City Exploration, said he isn’t concerned about running out of inventory but estimates the costs to drill a well and bring it online are up about 40% over past year because of soaring costs for material and labor, and that the number of rigs working in the Permian appears to have reached a plateau. Private companies in the Midland Basin, the eastern portion of the Permian, would run out of drilling locations viable at $60-a-barrel oil or less in about 5.6 years, on average, at their current pace, according to Enverus. They had an average of 5.8 years of the same inventory in the Delaware Basin, the western part of the Permian.

In a study earlier this year, Wells Fargo estimated the U.S. has about six to nine years left of shale-drilling locations, overall, that could generate sustainable returns with oil below $45 a barrel. The bank separately concluded that private companies had even less inventory than publicly listed producers, said people familiar with the analysis.

Smaller producers are running half the rigs in the Permian but only have roughly 20% of the area’s drilling inventory. Wells Fargo found the high drilling rates have depleted a large portion of their best remaining acreage, the people said.

In the Delaware Basin, larger companies Lime Rock Resources and Mewbourne Oil Co. have about seven to eight years of higher-quality inventory viable at oil prices below $45 a barrel, while Novo Oil & Gas LLC and Tap Rock Resources have less than five years, according to Enverus estimates.

Meanwhile, Endeavor Energy Resources LP had more than 13 years of such inventory in the Midland Basin, while others including Crown Quest Operating LLC and Petro Legacy Energy had about eight to nine years, and others including Hibernia Resources III LLC and Legacy Reserves had less than five years, according to Enverus.

Jason Churchill, CEO of Petro Legacy, said his company isn’t planning on adding drilling rigs beyond the two it operates in the Permian, but it is still planning to grow, adding 40 to 50 new wells a year for the foreseeable future. If private companies did slow their growth, it would most likely be because they follow public companies’ example and return more cash to investors instead of investing in growth, he said.

Many private drillers are looking to sell themselves to larger public companies, now that deal appetite has grown with higher oil prices, motivating them to preserve more of their inventory, analysts and executives said. Others are choosing to continue drilling to quickly sell oil at elevated prices and distribute the cash to investors, they said.

“Every year, thousands of wells get drilled, and that shrinks the inventory life,” said J McLane, chief investment officer at private-equity firm Lime Rock Partners. “It makes the undrilled wells more valuable.”