The 1MMBOD goal by 2025 is going to require to burn a lot of cash just to not pi-s wall street off
Https://www.artberman.com/blog/beginning-of-the-end-for-the-permian/
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Hess Bakken asset makes better wells and are more economical. The Bakken will bail out the Permian. Put on your winter boots and bibs because this will be our onshore savior
"The Permian will continue to be fully funded..." In other words, "Mike's Folly" will continue to su-k money away from the rest of the company.
"The Permian will continue to be fully funded". Titanic Syndrome: As the ship went down the band kept playing.
“The Permian will continue to be fully funded and supply revenue for the rest of the company”
Sure it will, while simultaneously eroding margins
The Permian will continue to be fully funded and supply revenue for the rest of the company.
The Permian is like one of those hamster wheels - the faster you move, the faster you need to move. Keep pouring in more money and rigs, and you will need to pour in more money and rigs to meet the unrealistic long-term production targets. The real question is does WR and MW realize this, or are they still living in the EIA fantasy world? This will play out in the long term - watch if we keep adding money to the Permian budget each year (haven't we the last several years?), and keep the wheel spinning by keeping production up with M&As.
The Permian will continue to struggle until new management takes over and new ideas are implemented. Current management in Wells is toxic and clueless.
“ If we can add 3-5 rigs per year we should be ok for a while.”
That is exactly the point
If we can add 3-5 rigs per year we should be ok for a while.
With facilities cost already built in for most areas, the ability to keep relatively lower cost production coming is not a challenging proposition even if we’re after secondary prospects.
All I know is the claim about the shale’s impending drop off a cliff is put forward every 6-12 months, and production has gone up every time.
Also not accounted for in this analysis is the fact that although the decline are quicker, the totals are higher - essentially increasing ROI per well. So….
Much of the problem in the Permian is due to Chevron's inability to properly frac the wells? Time for a new plan.
Shale has always been one big pyramid scheme don’t need a geologist to figure that out
I've known Art for a long time. He has an uncanny knack for seeing reality when others prefer fantasies (to wit, those EIA projections). Check out some of his other publications which put climate change, and society's reaction to it, in perspective. One can only wonder where SR and MW sit between those two Permian perspectives. I'm guessing there's more than a few MCBU PEs and REs who quietly agree with Art. I'm also guessing that the decline in Chevron's Permian numbers has been modeled and will curiously coincide with MW's retirement. If OP is correct about the cash burn, expect a lot more peripheral office closures (Angola, SJVBU, CBU, etc.) to divert cash to the Permian death spiral.