Rystad Energy: Shale Newsletter - July 2017

Midland Basin: Wolfcamp Target Benches

The Wolfcamp formation in the Midland basin has seen a steady increase in activity since 2011, and has become one of the top producing plays in Permian Basin. One of the main drivers is its stacked potential. Being able to target multiple benches has attracted a number of top operators. The targetable benches for the Wolfcamp play are Upper (A), Middle (B), and Lower (C, D). To be able to understand how operators are developing the Wolfcamp, Rystad Energy did detailed research on the depth and thickness of each bench. 

Rystad Energy has collected roughly 1000 wells from company Investors Presentations, as these companies have reported depth of target formation and benches for their wells. Based on this sample of reported wells, we calibrated the wells without a target bench. This is done by tagging wells that are located within close proximity to wells with known benches, and true vertical depths, then extrapolating across the Midland Basin.

Figure 1 shows the outlines of well activity where each bench is being targeted. Upper and Middle Wolfcamp share a similar shape covering Martin, Midland, Reagan, most of Upton, Howard, Glasscock, and parts of Irion counties. These counties define the boundaries of the Wolfcamp play. Lower Wolfcamp covers less area, in which Wolfcamp C covers most of Midland, Upton, Reagan, and parts of Glasscock and Irion counties. Wolfcamp D extends further north covering most of Martin, Midland, Glasscock, Reagan, and parts of Upton counties.

Midland, Glasscock, Upton, and Reagan counties are considered as the core of the Wolfcamp play because all benches are prevalent, and thus it has the most stacked potential. This core contains acreage that shows more prospectivity and desirability. Companies like Pioneer Natural Resources have acreage all across this area and are drilling wells in all benches. 

Middle Wolfcamp had the highest number of spudded wells in 2015 and 2016, which account for 50% of all the spudded wells in the Wolfcamp play. As of Q2 2017, the Upper Wolfcamp became the focus for operators and accounted for 70% of all spudded wells in Wolfcamp, which is a 35% increase in its share of spudded wells compared to 2016. In addition, operators are targeting the lower benches less often, due to relatively poor well performances.

Figure 3 compares the average cumulative production curves for wells starting up in 2015-2017 by target bench. It is evident that the Upper and Middle Wolfcamp outperforms Lower Wolfcamp. Even though Lower Wolfcamp, on average, does not exhibit optimal performance, there are still operators testing different well completions in hopes of better results.

Up until 2017, Upper Wolfcamp exhibited higher average proppant loading per foot than Middle Wolfcamp. Now, Middle Wolfcamp has the most intensity. The well intensity for Lower Wolfcamp has seen an increase in 2017 due to operators testing new completion techniques.

On the Midland side of the Permian Basin, Rystad Energy observes a clear dominance of top Wolfcamp layers (A and B). Some Lower Wolfcamp results look very promising and we are yet to see the full impact of high-density completions there. So far, average Lower Wolfcamp wells in Midland perform below type curves for A and B zones in the same areas.  Rystad Energy will continue to monitor how the play matures going forward and what other players it will attract.