Development in Block 37T1N is progressing slowly, with only 11 of 51 wells spudded, likely due to a phased strategy tied to infrastructure readiness. The Hazelwood Compressor Station, CTB, and SWD facilities are essential for handling production, and pending permits or construction delays could hinder well operations. Diamondback’s proximity to Midland offers logistical advantages, but timely completion of the compressor station and pipelines is critical to avoid production bottlenecks and regulatory challenges.

Analysis of Wells and Air Permits Data for Block 37T1N

Well Development Activity
- 51 wells are permitted in Block 37T1N, but only 11 wells (21.57%) have reached the spud (activity) stage. This suggests a significant number of wells are pending development, potentially indicating a phased drilling strategy or infrastructure dependencies.
- Contractor and Rig Usage:
  - Independence 306: 10 wells
  - Ensign 765: 1 well
- Proximity to Midland, TX: The wells are on average 12.02 miles away from Midland, offering logistical advantages by reducing transportation time for equipment and personnel.

Air Permits and Environmental Compliance
- Air Permits Overview:
  - Hazelwood Compressor Station – PBR New Registration
  - Hazlewood 19 CTB – PBR New Registration
  - McMorries 19 SWD 1D – PBR New Registration
- Approved Permits: 2 air permits are marked “COMPLETE,” while others are still pending.
- These facilities are essential for managing gas compression, oil separation, and produced water disposal, aligning with regulatory compliance through Permit by Rule (PBR) processes under the TCEQ.

Impact of Compressor Station on Development
The construction and readiness of the Hazelwood Compressor Station and related pipelines are critical to the timeline of well development in Block 37T1N. Key factors include:
- Infrastructure Dependency: Wells producing associated gas rely on pipelines and compressor stations to transport gas. Without this infrastructure, regulatory restrictions on gas flaring may limit or delay production.
- Regulatory Delays: Pending air permits for infrastructure could slow down station construction, impacting when wells can go into full production.
- Phased Development Strategy: Diamondback may delay spudding or completing wells until the compressor station is operational to avoid having wells ready but unproductive.
- Supply Chain Challenges: Construction of compressor stations and pipelines can be delayed by logistics issues, labor shortages, or weather conditions common to West Texas operations.
- Coordination of Supporting Facilities: Alongside the compressor station, the Central Tank Battery (CTB) and Saltwater Disposal (SWD) facilities must also be operational to handle oil, gas, and water production efficiently. Without these systems, production could face bottlenecks or operational shutdowns.

Key Observations and Conclusion
- Phased Development: The limited number of wells with activity dates suggests that development is being carefully aligned with infrastructure readiness.
- Proximity to Midland: The logistical advantage of being close to Midland supports efficient operations once wells and infrastructure come online.
- Infrastructure and Regulatory Risks: Pending air permits for infrastructure like the compressor station are a potential bottleneck. Diamondback’s ability to secure final approvals and complete construction will directly impact the pace of development in Block 37T1N.

In summary, well development is closely tied to the completion of critical infrastructure like the Hazelwood Compressor Station and associated pipelines. Monitoring the progress of these projects and remaining permit approvals will be key to understanding the full production potential of Block 37T1N.