Two new well permits issued in Block 39T2S in the Midland Basin may look routine at first glance — but context matters.
These are the first new permits since September 5, 2024, marking a clear restart in activity within one of Exxon’s most mature and heavily developed blocks. Rather than signaling exploration or step-out risk, the permits align perfectly with a manufacturing-style infill drilling program — one increasingly shaped by AI-driven subsurface intelligence and spacing optimization.
In a lower oil price environment, this combination matters.
A Mature Block, Not a New Bet
Block 39T2S has supported an extensive drilling program over multiple years. The latest permits don’t introduce new geology, new benches, or new operational behavior. Instead, they reinforce what the data already shows:
- Same county (Midland)
- Same field (Spraberry Trend)
- Same depth window
- Same pad clusters
- Same execution cadence
This is steady-state development, not experimentation.
The pause since September 2024 followed by new permits strongly suggests a measured restart of infill drilling, timed deliberately rather than reactively.
Surface Persona: Factory-Style Pad Development
Surface activity in Block 39T2S is tightly concentrated and highly repeatable.
Permits cluster within the same Block–Abstract–Section combinations and across the same leases, indicating pad-based infill development rather than new surface expansion. There is minimal surface sprawl and no evidence of greenfield risk.
Operationally, a small group of repeat rigs — led by H&P 607 — dominates activity. This points to:
- Standardized pad layouts
- Reusable surface infrastructure
- Consistent contractor deployment
- Predictable execution costs
Surface Persona Outcome:
A mature, efficiency-driven surface program optimized for repeat pads, minimal disturbance, and predictable execution.
Subsurface Persona: Repeatable Spraberry Manufacturing
Below the surface, the story is even more consistent.
Nearly all wells target the Spraberry Trend, drilled as standardized horizontal laterals within a narrow depth range centered around ~10,300 feet. There is minimal sidetracking, no material deviation in well design, and no evidence of exploratory drilling.
Total footage drilled reflects manufacturing-scale development, not appraisal work.
Sub-Surface Persona Outcome:
A highly standardized horizontal drilling program targeting proven Spraberry intervals with low geologic variability and repeatable execution.
Cadence Matters: Predictability Is the Signal
One of the most important signals in Block 39T2S isn’t geology — it’s timing.
Across all sections, the permit-to-activity lag clusters tightly around 42–45 days. Even Section 15, the most active section in the block, follows the same cadence as lower-activity sections.
There are no delays, accelerations, or bottlenecks.
Cadence Insight:
License Date + ~45 days is a reliable predictor of activity, enabling forward-looking planning and sales timing.
That level of consistency is only possible in mature, tightly controlled development programs.
Why Infill Drilling Wins in Lower Price Environments
Infill drilling isn’t just about drilling more wells — it’s about extracting more value from existing acreage.
When oil prices are under pressure:
- Exploration risk becomes less attractive
- Capital efficiency matters more than growth optics
- Inventory life becomes strategic
Infill drilling extends drilling inventory, improves recovery, and leverages existing infrastructure — all while reducing risk. Block 39T2S checks every box.
But spacing decisions in mature fields are hard. Poor spacing leads to frac interference, accelerated depletion, and capital destruction. This is where AI changes the equation.
AI-Driven Well Spacing: From Rules of Thumb to Economics
Well spacing optimization is inherently complex. The “right” spacing depends on permeability, porosity, pressure depletion, interference effects, completion design, and economics — not just geology.
Modern AI-driven workflows solve this by combining:
- Physics-based reservoir models
- Synthetic reservoir data that reflects real-world heterogeneity
- Machine learning algorithms optimized for economic outcomes
Instead of maximizing initial production, AI optimizes net present value (NPV) — identifying spacing that balances recovery, interference risk, and cost.
In mature blocks like 39T2S, this approach allows operators to:
- Safely densify well spacing
- Reduce parent–child interference risk
- Extend drilling inventory without stepping out
How AI Identifies Optimal Infill Locations
AI doesn’t pick wells from a single map — it learns from stacked spatial intelligence:
- Subsurface maps (structure, thickness, porosity, permeability, seismic attributes)
- Production and depletion maps (rates, cumulative production, pressure behavior)
- Surface constraint maps (pads, infrastructure, land use)
- Economic and risk maps (cost, hazards, frac containment risk)
- Temporal maps (pressure depletion, time-lapse performance)
Once aligned and standardized, AI models evaluate thousands of potential infill locations probabilistically — identifying economics-aware, interference-minimized well placements.
This is how infill drilling becomes predictable, scalable, and repeatable.
What ExxonMobil Has Been Clear About
ExxonMobil has been explicit: AI is not an experiment — it’s core infrastructure.
The company has embedded AI across upstream operations, supported by a unified enterprise data platform and high-performance computing. AI is already delivering material value through:
- Faster seismic processing
- Better reservoir models
- Improved well placement and spacing
- Optimized drilling and completion designs
This supports Exxon’s “design one, build many” execution model — exactly what we see in Block 39T2S.
Better models lead to better spacing decisions, which lead to higher recovery, which generates more data — creating a closed-loop, compounding advantage.
🧠 Integrated Operational Conclusion
Across surface execution, subsurface targeting, permitting behavior, and cadence consistency, Block 39T2S is a textbook manufacturing-style shale asset.
The restart of permitting after September 2024 isn’t a shift in strategy — it’s the next phase of a disciplined infill program, increasingly guided by AI-driven optimization.
In a lower oil price environment, this is exactly where capital flows:
- Low risk
- High repeatability
- Extended inventory life
- AI-enhanced recovery
Block 39T2S isn’t just drilling again — it’s demonstrating what the next decade of Permian development looks like.
