Index of Oil and Gas Operator Health in California

While Chevron was the second largest oil producer in the state, Chevron also operated the most unplugged wells of any California operator in 2022, with 26,502 unplugged  wells. The most up to date data (1/20/24) puts their unplugged well count at 26,244. While the operator has claimed to have plugged over 2,200 wells over the course of the last year,state records do not support this claim. CalGEM does not keep track of well plugging counts, and the existing CalGEM data shows this to not be likely.

Chevron only produced a daily per-well average of about 3 BOE/D for their entire portfolio of unplugged wells in California, ranking them 78th among the 261 California operators that reported production in 2022 (77th percentile). Compared to other California oil and gas majors, Chevron’s 2022 daily per-well production averages were about 15% below that of Aera Energy (Rank 68th; 82nd percentile), when Shell and Exxon sold Aera to divest from California oil and gas operations. Half of domestic oil and gas production between 2012 and 2022 came from wells that produced between 100 and 3,200 barrels per day, according to the Energy Information Administration. An onshore well that produces between 1,000 and 3,000 barrels of oil a day is considered a good production range. Almost all of of California’s oil wells produce marginal levels, much lower than even the cut-off for stripper wells, of 15 BOE/D.

Additional data on Chevron’s recent investments and divestments show that Chevron’s California operations are performing at comparatively poor levels as compared to their operations in other states. Prime examples are the case of Chevron acquiring Denver-Julesburg based operator Noble Energy in 2020 for $13 billion, which has a per-well oil production average volume of 36 BOE/D, and alternatively the case of Chevron’s recent divestment of oil wells in the Piceance Basin to Scout Energy, which at the time were producing a per-well oil production average volume of 14 BOE/D.

The analysis was completed for not just 2022, but the entire four year period 2019-2022, the results of which can be found in the Appendix (FracTracker Data Repository). The data shows consistent production declines in per-well production volumes for the majority of California oil majors over the course of this four year period, which continues the trend of decline since peak oil, four decades ago. The data shows that in 2022, average statewide daily per-well production equaled 3.3 BOE/D, while 88% of California operators with unplugged wells produced less than an average 4 BOE/D per well. Of note 2 BOE/D is considered a hard line in the industry for an oil well to just cover operational costs. Oil prices would have to remain over $130 per barrel for a well producing 4 BOE/D to cover just its own plugging and reclamation costs, whereas the average price for oil since 2019 has been about half that amount ($68 per barrel).