To make money in the oil business, you better be efficient, productive, repeatable, and reliable. This is a mature industry with lots of competition; the weak are eaten for breakfast.
The Delaware Basin in the Permian is the hot market, the epicenter of big M&A transactions with E&P companies. We wondered how many wells one drilling rig could punch each year in the Delaware – more or fewer than in other basins? The typical well in the Delaware is 10,000’ vertically deep with a 10,000’ lateral.
Turns out the answer is 16-17 wells per year per drilling rig:
Spears took a sample from all wells drilled in the Delaware in 2018. The chart seen above comes from that sample.
Here’s a few things we learned:
Although individual wells can be drilled quite quickly, when you add in moving and operational inefficiency, rig productivity slows.
If a frac crew can work on 40-50 wells per year, this means that 1 frac crew can support about 3 drilling rigs in the Delaware.
Total measured depth of Delaware wells is getting longer each year, which suggests that rig productivity measured in terms of wells per year probably doesn’t change much in 2019 and 2020.
So if you see an operator putting a rig to work this year in the Delaware Basin, think 16-17 new horizontal wells over the next 12 months at a total cost of about $100 million.