Shale growth: what if the Permian went CO2-neutral?

Shale growth has been slowing due to fears over the energy transition, as Permian upstream CO2 emissions reached a new high in 2019. We have disaggregated the CO2 across 14 causes. It could be eliminated by improved technologies and operations, making Permian production carbon neutral: uplifting NPVs by c$4-7/boe, re-attracting a vast wave of capital and growth. This 26-page note identifies the best opportunities.


Pages 2-5 show how fears over the energy transition have slowed down shale growth in 2019.

Pages 6-10 disaggregate the CO2 intensity of the Permian, by source and by operator, based on over a dozen models we have constructed.

Pages 11-15 argue why increased LNG development is the single greatest operational opportunity to reduce Permian CO2 intensity.

Pages 16-18 summarise advances in methane mitigation technologies and their impacts.

Pages 19-23 outline and quantify the best opportunities to lower CO2 from digital initiatives, renewables, lifting and logistics.

Pages 24-25 quantifies the sequestration potential from CO2-EOR, which could offset the remaining CO2 left after all the other initiatives above.

Our conclusion is to identify three top initiatives that companies and investors should favor. Industry leading companies are also suggested based on the patents and technical literature we have reviewed.

Shale EOR: Container Class

Will Shale-EOR add another leg of unconventional upside? The topic jumped into the ‘Top 10’ most researched shale themes last year, hence we have reviewed the opportunity in depth. Stranded in-basin gas will improve the economics to c20% IRRs (at $50 oil). Production per well can rise by 1.5-2x. The theme could add 2.5Mbpd to 2025 output.


Pages 3-5 review the theory of shale EOR. Its recovery factors could in principle surpass conventional EOR.

Pages 6-7 review lab results and field trials. They have been promising, suggesting >1.5-2x production uplifts should be attainable.

Pages 8-10 review the economics in detail. Our full model is informed by technical papers, and can be downloaded here.

Page 11 tabulates key statistics for using CO2 as a huff-n-puff injectant, the economic opportunities for carbon capture, but also the challenges.

Pages 12-13 attempt to quantify the production upside from shale EOR, by adapting our basin models.

Pages 14-15 cover the remaining challenges, including E&P patent-filing insights.

Page 16 lists a handful of companiesat the forefront of shale-EOR, including some earlier-stage start-ups.

EOG’s Completions: Plugged-In?

EOG has patented a system to deploy pressure and temperature sensors in its frac plugs, which are then retrieved at the surface, providing low cost data on each frac stage. The data can be used to improve subsequent frac stages. We model the economic uplifts at +$1M NPV and +5% IRR per well (at $50 oil).

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