Heading Out of a Summer Trough?

Well Quality Seasonal Trends


Taking a look at well results over the past year we observe that well quality based on IP rate conformed to a seasonal pattern for many operators both in the Bakken and Permian basins. Well results for these operators started the year off strongly but then bottomed out consistently around mid year. Results then turned around heading through 3Q with an acceleration in well quality.

There are numerous possible explanations for this and we don't see this behavior for all operators. Perhaps the most likely explanation is acreage selection where operators like to start the year off well by targeting high-quality locations late in the previous year. Production gets a boost early in the year and the company can "coast" a bit through the middle of the year before preparing for the following year.

Perhaps this means that investors should keep an eye out on well quality trends in the latter half of 2015 which, for these operators at least, could show signs of continued improvement.

Figures Below: Well results in 2015 for many operators softened during the first half before improving in 3Q.

CLR (Bakken)

CLR (Bakken)

PXD (Permian)

PXD (Permian)

WLL (Bakken)

WLL (Bakken)

LPI (Permian)

LPI (Permian)

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