The Permian Basin | March 2020
Field Overview
Current WTI price is $25.88/bbl. 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
Active Drilling Rigs in Basin- 351
Total Rigs in Texas- 338
Total Rigs in United States- 664
Total U.S. Rigs down 35.2% YTD
Permian Top Producers
Top Gas Producer – Apache
Top Oil Producer – Pioneer
Financial & Economic Updates
Chevron Hits the Brakes on Permian, Cuts $8 Billion Across Company
- To address the new landscape, Chevron announced on Tuesday, 24 March, that it has reduced its capital outlay from $20 billion to $16 billion. About $2 billion of the cuts will come from the company’s unconventional programs in Argentina and the US. But a company release said the reductions will “primarily” affect the Permian where it holds about 2.2 million acres.
- Chevron said its new Permian production target is about 125,000 BOE/D, down 20% from the original expectation. In 2018, Chevron said it produced 159,000 BOE/D. Overall, the company’s total production is expected to remain flat over the year.
- At least $1.2 billion in reductions will be spread across Chevron’s other upstream business units in the US and across the world. Another $800 million will be trimmed from the downstream and chemicals businesses.
State Highlights
UPDATE: Oil Industry Budget Cuts Adding Up Across the Globe
- The ripples of the oil price crash that first hit US shale plays are now impacting oil and gas companies around the globe as they cut costs to survive. The ongoing price war between Russia and Saudi Arabia and demand destruction caused by the COVID-19 pandemic has drawn a historically swift market reaction.
- High-costs producers–essentially everyone outside of Saudi Arabia and maybe Russia–are cutting investments, expenses, and sometimes even executive pay to try to keep their cash flow in balance. Capital plans from these producers around the world are shifting downward by an average of 30–35%, according to company reports.
- An updated list of oil and gas companies that are lowering their spending immediately.
Record 5.0-magnitude earthquake hits near Permian Basin town
- A record-setting 5.0-magnitude earthquake hit near the Permian Basin town of Orla, Texas, on Thursday morning.
- U.S. Geological Survey officials say the quake occurred at 10:16 a.m. about 16 miles southwest of Orla in a rural area off FM 652. There have been 61 earthquakes in West Texas this year but this was the strongest recorded in the region’s history, USGS data shows.
Top Gas Producers
| Rank | Company | Production (MMscf / Month) |
| 1 | Apache | 26,431 |
| 2 | Pioneer | 23,313 |
| 3 | Oxy | 22,051 |
| 4 | Cimarex | 16,879 |
| 5 | Chevron | 15,978 |
Top Oil Producers
| Rank | Company | Production (STB/Month) |
| 1 | Pioneer | 8,601,681 |
| 2 | Oxy | 7,470,950 |
| 3 | Diamondback | 5,083,969 |
| 4 | COG | 4,674,109 |
| 5 | XTO | 4,653,137 |
Refining
Texas Gas Production
Texas Oil Production
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