Oil production 0 for 2021Lea Co

The only Horizontal well we have is Lusk 23 Fed 3002540166 says it is active but have no production for 2021 just curious other wells are vertical and have production numbers through April. 19S 32 E lea co. NM ?

No volumes since Feb 20 seems kinda inactive to me. Call EOG and ask them, it may be as simple as they had a rod part in 2020 at $20 oil and decided that a 4bopd well wasn’t worth fixing.

You (and EOG) have other wells holding your ORRI/lease. You figure at some point they should drill modern HZ wells there. But that point may be > 2030 or something. Assuming people still use 100Mbd of oil in 2030.

Thanks NM i knew production was low but I Thought they had to pump a little just to keep it on the active list I was told they are bringing more rigs into Lea Co. Iguess I WAS HOPING they were retooling to redrill I will call though thanks again !!!

I would have thought that ban on federal leases would have driven up private mineral interests leases and prices. I had a 3 year contract with an option to renew in the northern part of the county but they didn’t renew. Does anyone happen to know what the going rate for a NMA is right now in northern Lea County. Can’t remember the section # off the top of my head but it is about 10 miles northeast of Lovington.

Russell

The ban doesn’t affect existing leases, and all (or close enough to all) of the best Federal land in NM is already leased.

NE of Lovington is kind of off the beaten path. There is San Andres horizontal drilling right on the NM/Tex border but that is more like 20-25mi NE of Lovington. I don’t know what the going lease rate is per NMA in your area. I would guess something in the low triple digits/NMA for bonus, if anyone is leasing at all.

Timmy,

Yeah they should have to TA or plug the well at some point (a year of inactivity?), they may have gotten some special dispensation due to stripper well status or something, but I saw nothing in the well file. I’m getting old, I forget the rules.

The Dawn Of A New Era For U.S. Shale

By Tsvetana Paraskova - Jun 26, 2021

Higher oil prices and capital expenditure discipline are setting the stage for the highest free cash flow on record for the world’s exploration and production companies this year. And U.S. shale firms—set to generate $60 billion free cash flow—are primed for playing a key role in the record-breaking free cash flow from global upstream operations. The U.S. shale patch is expected to be the biggest beneficiary of capex discipline and high oil prices, as well as the largest contributor to the highest-ever free cash flows from the upstream business globally, independent research firm Rystad Energy said in a new report.

$70 oil can certainly help a lot, but it is also capital discipline at every single oil company—from supermajors to U.S. independents—that is contributing to record cash flows this year.

Free Cash Flow Set To Hit Record-Breaking $348 Billion in 2021

The world’s public oil firms are set to see their combined free cash flow—all cash flows from upstream activity excluding such from financing or hedging effects—surge to a record-breaking $348 billion in 2021. According to estimates from Rystad Energy, this would be $37 billion higher than the previous all-time high of $311 billion, which was generated in 2008. Back then, just before the financial crisis, oil prices averaged $100 a barrel that year.

The key driver of record cash flows would be the U.S. shale patch, which is estimated to rake in nearly $60 billion in free cash flow before hedging effects, Rystad Energy forecasts.

This would be quite a U-turn in the financial fortunes of U.S. shale drillers, which have struggled to generate positive free cash flow for a decade since the shale revolution began.

The Dawn of ‘New Shale Era’

According to Bloomberg Intelligence estimates, U.S. shale producers are expected to generate a combined $30 billion in free cash flow in 2021 amid disciplined capital spending and higher oil prices. That’s so different from the past boom and bust cycles where the U.S. shale patch loaded up on debt to drill and produce as much oil as possible, contributing to sinking oil prices.

This year, however, could turn out to be the beginning of what analysts have started to call “a new era” for U.S. shale, where returns to shareholders and paying down debts take precedence over production growth and record output.

The expected windfall from free cash flow this year is just one-tenth of the $300 billion in net negative cash flow the U.S. shale industry has lost in the 15 years since the first shale boom, per Deloitte estimates from last year.

Nevertheless, the expectations of free cash flow this year make analysts optimistic that the shale patch is at a turning point and will keep discipline for at least another year or two.

According to Rystad Energy, shale’s free cash flow in 2021 is expected to exceed the free cash flows from both the deepwater and shallow water segments.

The conventional onshore supply segment will earn the biggest share of free cash flow, at $160 billion, but this will still be lower than the record from these upstream activities set in 2011, the intelligence company said.

Oil Firms Primed For Super-Profits

Gross revenues at all public upstream firms are set to surge by 55 percent, or by nearly $500 billion, this year compared to last year, thanks to higher oil prices, rising global demand, and a tighter market. Considering that spending levels of listed E&P firms globally are set for just a 2-percent increase this year—courtesy of still strong capital discipline across the board—producers are set for materially higher profits, Rystad Energy reckons.

“Oil demand has gradually increased after the initial shock of the Covid-19 pandemic, and OPEC+ continues to hold back volumes from the market. The consequent high price movement has been further supported by a slow ramp-up in US tight oil activity. In conjunction with the persisting low investment environment, E&Ps are enjoying super-profits,” Espen Erlingsen, head of upstream research at Rystad Energy, said.

Income at the supermajors, for example, nearly returned to pre-pandemic levels in the first quarter of this year, thanks to dramatically higher oil prices. Further upsides in earnings are on the horizon with this quarter’s oil price rally, analysts say.

Higher oil prices, conservative spending, and the benefits of the massive cost cuts from last year are setting the stage for record cash flows at Big Oil this year if the price of oil averages $55 per barrel, Wood Mackenzie said at the start of this year.

This forecast could even turn out to be quite conservative, considering that investment banks and forecasters now see oil prices averaging at least $65 a barrel this year, and a growing number of analysts and top executives at Big Oil aren’t ruling out a brief spike to $100 per barrel in coming quarters.

The immediate priority for E&P firms, including in the shale patch, will be to use the expected super-profits and record cash flows to pay down debts and reward shareholders. Capital discipline will likely hold this year, but upstream investment will need to rise if the world is to avoid sleepwalking into a supply deficit within a few years.

NM I called EOG today and left a message I was shocked when I got a return call back within 2 hours. YOU were right its something mechanical with well he didnt go into details but then he added they had made a mistake when we sold half of our interest 2 yrs ago and the buyers have been getting ALL the Royalties which really didnt amount to that much, 200 bucks or so but are trying to rectify it as we spoke, he didnt know how such a thing could happen CRAZY! Keep in touch if you here any Rumblings in LEA CO. Best Regards, Timmy D

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