Keep pulling the thread on Jack McClendon.
The era of the U.S. oil industry adding one million barrels per day of production growth year-over-year is believed to be over.
Drilling efficiency in the Permian Basin has improved dramatically; a 7,500-foot lateral well that took 25-35 days to drill in 2015-2016 can now be drilled in under 10 days.
On April 17th, the price of West Texas Intermediate (WTI) crude oil was approximately $83 per barrel.
The Baker Hughes oil and gas rig count has been trending sideways since 2023 and recently fell by three rigs.
Sienna Natural Resources' business model involves acquiring undercapitalized and underappreciated conventional oil and gas assets to increase production and reduce operating costs.
The United States is now the largest oil and gas producer in the world.
The Permian Basin produces at least 5 million barrels of oil per day, accounting for a significant portion of the U.S. total of 13 million barrels per day.
Operating costs for Sienna Natural Resources have increased by 25% to 30% over the last five years, driven by higher costs for personnel, power, and chemicals.
ExxonMobil and Chevron have become dominant players in the U.S. shale market, leveraging their large balance sheets and integrated operations.
The Biden administration is perceived by the oil industry as actively working to keep oil prices low, viewing it as a primary tool to control inflation.
A sustained oil price above $80 per barrel for a period of four to eight months would likely trigger a supply response from the U.S. oil industry.
There is an estimated five to ten years of core, economic drilling inventory remaining in the Permian Basin.