Regarding the product itself, Utah’s waxy crude requires significantly more expensive logistics to handle and transport (e.g., heated tanks, insulated transport, steam-equipped rail cars), adding around $11/barrel in transportation costs compared to $1-5/barrel in competing basins. Compounding the issue is the reality of horizontal drilling. Horizontal wells exhibit very steep decline curves, peaking quickly with high production volumes, then often dropping 200% below initial production volumes within 30 months. Regular capital injections are needed to consistently drill new wells and maintain production, offsetting this decline curve. More on this ahead. This is why we say we have a growth basin — if we can keep it. The success of the basin relies on a bevy of factors, and any tweak to those factors will have ripple effects throughout the basin, the economy and the State of Utah’s budget. Speaking of Decline Curves … In early November 2025, the U.S. Energy Information Administration published an analysis showing that horizontal wells experience rapid declines, requiring more drilling to sustain production. 0 2 4 6 8 10 12 2010 2012 2014 2016 2018 2020 2022 2024 2010 2012 2014 2016 2018 2020 2022 2024 0 20 40 60 80 100 120 2010 2012 2014 2016 2018 2020 2022 2024 pre-2010 vintage wells 2010 2012 2014 2016 2018 2020 2022 2024 Lower 48 states crude oil and natural gas production by well vintage (2010–2024) crude oil natural gas million barrels per day billion cubic feet per day 2024 new well production and production decline from existing wells pre-2010 vintage wells For those unfamiliar with this type of analysis, the graphs show that newer wells initially produce more, seen in the upward trend. But then follow the wave down, and you can see the angle go from something horizontal to looking more like it’s dropping off a cliff. The analysis expands upon this: “Between 2010 and 2024, hydrocarbon production from new wells in the Lower 48 states (L48) generally offset and exceeded declining production from existing wells. Because production from oil and natural gas wells declines over time as reservoir pressure decreases, new wells are required to maintain the same production level. The increasing number of horizontal wells has contributed to this trend because horizontal wells exhibit higher decline rates than vertical wells.” Why does this matter? It is crucial to ensure a stable and supportive regulatory and cost environment to sustain consistent investment in new drilling and maintain current production levels. The Uinta Basin has plenty of inventory to sustain new wells and maintain production, but if we don’t keep drilling new wells, which, it bears mentioning, comes with a massive price tag, production falls off sharply and very quickly. That means state and municipal revenues are significantly at risk, including the severance tax. Why wouldn’t we continue to drill wells? Consider a recent legislative proposal to add significant new taxes on crude and natural gas production, replacing the gas tax, a stable, longstanding revenue source, with a new, unstable revenue source pegged to highly volatile commodity prices, and that would land squarely on the backs of the oil and gas industry, rather than road users. More on this ahead as well. Increasing the cost of drilling new wells in Utah makes the basin less competitive for investment dollars than other basins. We can’t move the oil and gas, but the dollars it takes to unlock it move quickly. This isn’t speculation; we have seen companies and 10 UPDATE
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