re: Big baws move to dominate Permian

That’s true for the Permian but most companies are sinking because of horrible decline rates and not enough well spacing.

It takes about 3.5 mill to drill and another 4 mill for a 60 stage frack job. That’s 7.5 million, but you also have to pay to lease the acreage. An Acre can go up to $90,000 right now.

Let’s say 8 million dollars in Cost for 1 well.

You produce an average 6000 barrels per day your first 30 days. After 30 days, you are making around 500-600 barrels per day for the rest of your first year. At the end of that first year, you are now getting 80% water.

You get about 10-12 million in revenue after your first year but don’t forget that you have royalties to pay.

You are not making more than 12 million on 1 well after a few years of production for yourself. You still made 4 million in profit but that’s not enough to fund another well. Hence you have to ask for more investment. Therefore, you have no positive cash flow.


Offshore, your well will cost you at least 60 million dollars, but you are easily getting 10,000 barrels of oil a day on average for a few years. Exponentially higher investment but if your wells are good, you are going to make billions in revenue if you have 15-30 good producing offshore wells.