Big Oil taking smaller rivals to school on shale

Big Oil, Shale, Exxon, Chevron

Jordan Blum – Houston Chronicle – Big Oil companies such as Exxon Mobil and Chevron are surpassing their smaller shale drilling rivals in well productivity in the Permian Basin for the first time in years as they prepare to dominate the oil and gas field, a new study contends.

New drilling and production data indicates the super majors in 2019 have passed the top independent shale players when it comes to initial well output volumes in the Permian, a “remarkable” development for the future of the basin, said the Norwegian research firm Rystad Energy. The majors have pushed oil output per well to record highs this spring at a time when many observers contend Permian productivity is close to peaking.

The world’s biggest oil companies came to shale slowly, initially left behind by the smaller, nimbler vanguard of the shale revolution. But with oil price muted and Wall Street pressing oil companies to hold the line on spending, many of them are scaling back their Permian activity.

And, with greater shale acreage, more dollars to develop their holdings and mass-production drilling techniques, Big Oil companies are proving that the industry isn’t done improving the productivity of shale oil wells, said Artem Abramov, head of shale research at Rystad. The energy majors are leading the transition to the so-called manufacturing approach by using repeatable processes to drill more wells while saving money per well.

“Interestingly, we have been observing a new period of improvement since the second half of 2018,” Abramov said.

Exxon Mobil has become by far the Permian’s most active driller with more than 50 rigs operating in the West Texas oil field, increasing production there by nearly 90 percent in 12 months. Chevron is now one of just two companies producing more than 420,000 barrels of oil equivalent per day from the region, the companies said Friday in their quarterly earnings reports. To a lesser extent, the European energy majors Royal Dutch Shell and BP also are focusing on Permian growth.

A typical Permian shale well drilled horizontally is now producing about 830 barrels of crude oil per day during its second month of output, an all-time high, Rystad said. Including natural gas and other liquids, the average new Permian well churns out 1,100 barrels of oil equivalent a day.

The energy super majors now average more than 1,300 barrels of oil equivalent per day per new well, while the top 10 shale independents have dipped slightly and are now just more than 1,200 barrels per day, Rystad said.

One key driver is the average horizontal length of each Permian well has grown from 5,000 feet in 2013 to about 8,500 feet in the second quarter of this year, Rystad said. That’s a lot more hydraulic fracturing, or fracking, that can be conducted in each well along those longer well laterals.


The crossroads of energy information for minerals owners in Oklahoma. Where you can: See recent prices of mineral and lease transactions. Receive an offer to lease or buy your minerals.

Find relevant news stories on the most active areas, including the Scoop and Stack Plays.

Data Powered by Oseberg

Today’s E&P world is rapidly shifting towards data-driven decision making, but those decisions are only as good as the data behind them. Access Oseberg's deep, accurate, and detailed pool of insight-rich industry data with our powerful analytical and search tools and get the clearest picture of what's happening as soon as it happens.


This web site is maintained solely for the personal use of our visitors. Although we at Oklahoma Minerals have made all reasonable efforts to provide accurate information, we cannot guarantee the completeness, timeliness or accuracy of the information contained herein. Nothing in this web site contains investment advice. Any decisions based upon the information contained in this web site are the sole responsibility of the user.

Copyright © 2021 OklahomaMinerals.com

To Top
Natural Gas Futures 'Reinvigorated' by Weekend Cold Shift as Prices Soar EarlyRead More