How fast can producers bring on new oil if they start drilling again? The data miners at Oilfield Logix handed me a fresh batch of newly mined wells this morning.  These wells covered the state of Oklahoma – SCOOP/STACK mostly – and included the four quarters from the last part of 2018 through Q3 2019.

I did the following math:  Subtract the date the directional tools were pulled out of the hole from the date of the frac job.  This estimates the lag from when the wells reached total depth (TD) to the start of the frac job.  The lag for Oklahoma this past year ranged from about 10 days to about 200 days, with the midpoint landing around 80 days.

Here’s a few assumptions:

4 wells per pad 

7 days per well spud to TD

80 days from TD to first frac stage

7 days per well to frac

3 days to wait after frac before flowback starts

And here is the calculation (in days) from spud to first oil in Oklahoma:

In Oklahoma, if you see a drilling rig move onto a new well pad on January 1st, you can expect oil and gas to be flowing from that well pad around early May… a little over 4 months later.

There are some very efficient operators in Oklahoma who can spud a well on January 1st, drill a single well on the pad, build a tank battery, frac it and bring on first oil by mid-February, but this is a rare beast.

As a result of this lag effect, US oil production is still high in January 2020 despite a collapsing rig count.  Oil is just now being produced from wells that were spudded in the summer of 2019…back when rig count was 20% higher than today.

This is why we think US oil production will be lower by summer 2020.  How much lower?  10%?