The Permian Basin | June 2020
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 June)
Active Drilling Rigs in Basin- 125
Total Rigs in Texas- 107
Total Rigs in United States- 284
Total U.S. Rigs down 73% YTD
Permian Top Producers
Top Gas Producer – Apache
Top Oil Producer – Pioneer
Financial & Economic Updates
Not a lot of financial information to be presented this month within the Permian outside of mass restructuring. Please navigate to the periodicals page, or listen to a podcast that we have uploaded recently to supplement your knowledge of the industry in the present.
An End to Flaring?
In 2018, Texas producers flared away $750 million in natural gas. This came from a report published by the Institute for Energy Economics and Financial Analysis which also went on to state, “In the current price collapse and anticipation of a boomlet, prayer has been abandoned and the industry is burning surplus gas to prop up oil and gas prices. It is not working.” In order to address these concerns, EOG paired with New Mexico’s Oil Conservation Division to launch a new project. This project addressed temporary shutdowns of third party pipelines where gas was looped back into active wells during an outage instead of flaring it and reintroduced the gas back into the system when pipeline operations were restored. Other solutions include the development of cryptocurrency mining units that withstand the Texas heat.
The Sierra Club has filed a suit against the Army Corps of Engineers seeking to invalidate the permitting granted to the Permian Highway Pipeline. This Pipeline is a joint project between Kinder Morgan, EagleClaw Midstream Ventures, and the Apache Corporation. Construction for the 430 mile pipeline from the Waha Hub to the Gulf Coast exports market began in March in order to address issues centered around carrying capacity. The Sierra club claims that the proper evaluation of environmental risk has been neglected, so the progress made thus far will be halted until a legal resolution is reached.
Top Gas Producers (2020 cum)
(MMscf / Month)
Top Oil Producers (2020 cum)
Texas Oil Production
Texas Gas Production
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