When looking at well lifecycles in aggregate it’s easy to forget that rig and frac crew activity do not follow a single pattern. Rather, wells are individually controlled by of hundreds of distinct operators each with their own strategies and biases. It is no surprise then that patterns emerge in completions activity for each operator. Today we will talk about Exxon, their unique internal bias towards completion activity and how this makes seven wells in the Texas Haynesville important for near-term production forecasting.
Long gone are the days of The Big Rich wildcatters hitting it big on single well speculations. Our industry is now more like a manufacturing business. Mineral plays with known geological properties are developed over years with carefully planned well placements that bring online predictable quantities of oil and gas. It is most common for operators to set up a kind of assembly line where permits come before rigs which come before frac crews with each well being turned into sales in steady cadence.
The assembly line allows for easy resource development over years. Rigs and frac crews can be contracted for loner periods of time leading to more stable development but this comes at the cost of flexibility and in certain cases efficiency. A production slug is when a company chooses to drill a larger number of wells without frac crews close behind and then complete them all at once. This is most common in the NorthEast where individual wellpads tend to contain a much larger number of wells and frac crews physically cannot arrive until rigs have left. But, in other regions like the Haynesville the slug still makes occasional sense. When wells are drilled in close enough proximity to one another rigs and frac crews can benefit from a reduction in travel time between each location and ancillary services like waste water disposal and sand delivery can be arranged in bulk.
Hyperion data shows one such possible slug being developed by Exxon in the Texas side of the Haynesville. Exxon, a company with an internal bias for efficiency has been building up a DUC inventory of seven wells in a very high-IP part of the Haynesville. Our production model expects these seven wells could each produce 20,000mcf/d when brought online.
Hyperion customers will receive the API numbers and status updates when frac crews arrive. Should these wells come online in short order the impact could be in the short-term significant.