Mizuho Securities USA: 25 More Years of Oil Shale Wells Left to Drill

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It’s halftime in the epic U.S. shale game with roughly 25 more years of oil drilling left and 22 more years of gas targets, according to a Mizuho Securities USA analysis.

And the undeveloped leasehold that is left carries an average price of $10,000 an acre, ranging from $80,000 in New Mexico’s northern Delaware Basin to $100 on the Permian’s Central Basin Platform.

To date, roughly 290,000 horizontals have been landed in tight rock in the Lower 48 and 270,000 locations remain, Mizuho energy analyst and managing director Nitin Kumar found in a recent study.

The findings are based on a Mizuho database of more than 325,000 horizontals landed across North America since 2005 and more than 81 million data points, such as each well’s gas and oil output, spacing and cost.

“Based on our analysis of remaining inventory … we estimate about 269,000 wells remain across core plays in U.S. shale compared to some 290,000 horizontal wells drilled in core basins since 2008,” Kumar reported.

“At the pace of development in 2024—some 10,800 wells—we estimate this represents roughly 25 years of remaining inventory depth in shale.”

Of the undrilled total, about 13% is in U.S. shale plays’ Tier 1 or core acreage and 22% are in Tier 2 areas, totaling about 93,000 future well locations, which would be some eight to nine years of drilling at the 2024 pace.

“Using the adjusted well productivity for remaining well inventory, we estimate U.S. shale can hold Lower 48 oil volumes flat for about nine years—or until 2033—below $60/bbl WTI,” he wrote.

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Operators with the most remaining oil location inventory are Chevron Corp., Hess Corp. (now a part of Chevron as of July 18), Diamondback Energy and Crescent Energy based on their 2024 drilling pace.

Holding the most remaining gas inventory is Range Resources.

In the Permian in particular among public E&Ps there, Diamondback has 25 years remaining, Coterra Energy has 23 and Occidental Petroleum and Chevron each has 22.

In Lower 48 gas plays, Range, Antero Resources, EQT Corp. and EOG Resources (including in the Utica shale) each have more than 15 years remaining.

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Among the Permian cores—which include the New Mexico side of the Delaware, Texas-side Delaware, the northern Midland and the Midland’s Howard County—the average value is more than $40,000 per undeveloped acre with the Delaware’s core in New Mexico worth some $80,000 an acre, he found.

He also found that private E&Ps have been pushed to the north and south in the Midland. In the Delaware, “private activity has focused on the New Mexico Shelf to the north and Reeves/Pecos border in the south part of the basin.”

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