Wednesday, December 7, 2016

Non-Cartel Permian Region Oil Production Increase back to previous high

The function is not the rig count, the function is the rate of increase of production.

1 comment:

Ryan Harris said...

One oil well used to be a single vertical shaft that would collect oil from the immediate vicinity of one formation.

Now, one oil well consists of a vertical shaft with multiple horizontal shafts that branch off for thousands of meters at multiple depths to catch oil from ALL the formations below the well over large distances.

So the comparison isn't apples to apples here. And the costs are not apples to apples. The apparent rise in productivity celebrated on Wall Street largely has to do with lower wages. The length of time it takes a drill rig to complete and effectiveness of well stimulation has improved, but the 30-50% of the improvement isn't technological improvement.