In the 2Q earnings call for Texas Pacific Lands, CEO Tyler Glover said the belief that Permian geology is nearing exhaustion and past its peak is “a misguided conclusion.” He added, “First, a slowdown in activity due to lower oil prices should not be conflated as the slowdown due to limited drilling inventory. Upstream companies are still price sensitive. It is reasonable to slow down development when commodity prices have declined. This slowdown does not diminish or change how much resource remains.”
Glover added during the call Aug. 7, “The Permian still retains a long runway of undeveloped inventory… A report published earlier this year by Enverus … estimates that there are over 60,000 locations with breakevens below $60 oil and $3 natural gas. This represents undeveloped resource upwards of 30 billion barrels of oil.”
Upstream companies will continue to drive breakeven economics lower and improve resource recovery, according to Glover. Permian averaged 323 horizontal rigs in 2023 and declined 8 percent to 296 in 2024. But total drilled feet increased about 5 percent during the same period. “Declining rig counts were more than offset by increased drilling efficiency,” he said. “What operators are doing instead of drilling one-mile laterals within a section, they’re drilling u-shaped or horseshoe-shaped laterals that allow longer lateral length while staying within the leasehold boundaries.” Glover said TPL had zero horseshoe wells on its royalty acreage three years ago.
TPL management said the company in 2Q featured record results for royalty production, produced water royalty revenues and easement income despite declining oil prices.
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