Test Rates Don't Tell the Whole Story

  • The amount of oil produced prior to the test of a new well in Texas may provide additional insight into the quality of wells a company is drilling in that state beyond the simple results of the 24-hour test.
  • Data and analysis available on the DISCERN Energy Platform suggests that several operators may be reporting initial well tests that under estimate actual well performance versus peers.

  • As an example in the Midland Basin, Callon Petroleum stands out where the average 24-hour oil rate is above average at 765 bpd vs 673 bpd. However, on average its wells produced 12 Mbbls of oil prior to the test vs the average of ~5 Mbbls. Several of the company's wells produced over 20 Mbbls prior to being tested.

  • The implication is that Callon's wells may actually be notably better than simply indicated by the test rate. Details such as this are quickly surfaced by the DISCERN Energy Platform and can give additional insight beyond more simplistic analysis.


Figure 1: Well IP rates may be understated if tested after ~10,000 bbls or more have been produced. 



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