Permian Basin News Pulse December 2020

The Permian Basin | December 2020

Field Overview

Located in West Texas, the Permian Basin has been producing oil for over 100 years. It leads the US in oil production and estimates put 43 billion bbl of oil still in the Permian; 80% of those reserves are believed to be at less than 10,000 feet. Some top formations are the Wolfcamp, Upper/Lower Spraberry, and the Leonard.


State Drilling Statistics (End of December)

Active Drilling Rigs in Basin- 175
Total Rigs in Texas- 161
Total Rigs in United States- 351
Total U.S. Rigs down 56% YTD

Permian Top Producers

Top Gas Producer – Cimarex Energy
Top Oil Producer – Diamondback Energy


Basin Highlights

No More New Mexico Freshwater Sourcing

Last month’s Basin Breakdown discussed how Solaris Water Midstream began operating a new facility to service the growing needs for water processing thanks to the increased hydraulic fracturing activity. December brings even more good news for the company as New Mexico puts a stop to freshwater sourcing from state lands for drilling and completions. This means that projects applying to use this fresh groundwater will be denied as an emphasis is being put on recycled water use. The primary reason for the announcement falls on the shoulders of water scarcity as New Mexico has become a more prominent producer in the last 5 years. This development has been in the works for a while. Consider that the region of New Mexico hosting the Permian receives 13 inches of rainfall annually. Municipalities and farmers have been filing lawsuits to steal what they feel is their fair share back from oil and gas. This solution should appease everybody and be a huge benefit to Solaris Water Midstream allowing them to develop midstream solutions to develop recycled water for whoever demands it.

Article Link

Diamondback Finds Means of Growth

Apache plans to reduce development in the Permian and pursue global developments amidst depressed prices. The company recently completed its third exploration test off the coast of Suriname which happened to be the best so far. With plans to finish another two exploration wells through the end of the year, Apache is hoping to prove its competence to partner Total. While activity abroad is going well, activity in the Permian will be suppressed. Apache’s Permian centerpiece, the Alpine High play, returned most of its shut in volumes but will continue to receive minimal funding through the end of 2020. If prices do recover and make new wells economic, they will change their plan. For now, they will continue investments in the Suriname project and focus on completing DUCs domestically.

Article Link


Top Gas Producers (2020 cum)

RankCompanyProduction
(MCF)
1Pioneer222,826,058
2Diamondback177,863,810
3COG139,599,183
4XTO133,404,177
5Parsley94,482,972
Hyperlinks to available Q3 2020 Reports

Top Oil Producers (2020 cum)

RankCompanyProduction
(Bbl)
1Pioneer81,367,442
2Diamondback59,349,020
3COG48,043,286
4XTO47,240,678
5Parsley34,727,854
Hyperlinks to available Q3 2020 Reports

Refining


Texas Oil Production


Texas Gas Production


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The information contained in this newsletter is provided by RARE
PETRO Engineering, PLLC via the following sources unless otherwise
noted:

www.eia.gov
www.drillinginfo.com
www.bhge.com
RARE Petro Analytics

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