Permian Basin News Pulse – February 2020

The Permian Basin | February 2020

Field Overview

Current WTI price is $33.29/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- 411
Total Rigs in Texas- 400
Total Rigs in United States- 790
Total U.S. Rigs down 24% YTD

Permian Top Producers

Top Gas Producer – Apache
Top Oil Producer – Pioneer


Financial & Economic Updates

Oil War: Some Permian Basin Operators Already Scaling Back Operations

  • In a pair of statements, Midland oil company Diamondback Energy and Austin oil company Parsley Energy confirmed plans to cut back the number of drilling rig and hydraulic fracturing crews in the shale play.
  • Ranked by drilling permits as the fourth most active driller in Texas during 2019, Diamondback typically has 20 drilling rigs in the field at any given time but now plans plans to remove two drilling rigs from service in April and a third during the second quarter. The company plans to reduce the number of hydraulic fracturing crews from nine to six.
  • Based on drilling permits filed, Parsley was ranked among the top 20 drillers in Texas during 2019. The company keeps 15 drilling rigs in the field but plans to reduce that number to 12 rigs. Parsley uses the services of five hydraulic fracturing crews but plans to reduce that number to three.

Article Link


State Highlights

Water Companies Up Presence in Permian Basin

  • More water midstream companies are looking to get in on the increasing demands of the Permian Basin where production boomed in southeast New Mexico and West Texas.
  • Midland-based Layne Water Midstream announced a deal with the Texas General Land Office (GLO) that would see the company up its water rights for disposal and reuse on the Land Office’s acreage in Reeves and Culberson counties in West Texas.
  • The original deal signed in November 2017 between the company and the GLO allowed only for the production and sale of water to the industry, and the amendment now allows for the treatment and reuse of water along with its transportation and disposal.

Article Link

Hunt Oil Seeks Latest Fortune in Permian Basin

  • A storied oil company that got its start in East Texas is seeking its latest fortune in the Permian Basin of West Texas. Founded in in 1934, Hunt Oil Co. drilled its first oil wells in the Piney Woods of East Texas, and over the decades it developed projects around the globe.
  • Closer to home, the independent and privately held Dallas oil company filed for seven drilling permits with the Railroad Commission of Texas over the past week.
  • Located in Glasscock County, the horizontal wells target the Spraberry field at total depths of 7,800 to 9,000 feet. Hunt filed for 80 drilling permits in 2019. All but one were for wells in the Permian Basin. The company’s wells produced nearly 11.5 million barrels of crude oil and more than 31.2 billion cubic feet of natural gas from January to November 2019, Railroad Commission records show.

Article Link


Top Gas Producers

RankCompanyProduction
(MMscf / Month)
1Apache24,192
2Pioneer22,668
3Anadarko18,310
4Cimarex17,435
5COG 15,811

Top Oil Producers

RankCompanyProduction
(STB/Month)
1Pioneer8,249,717
2Diamondback5,210,775
3COG4,552,750
4Endeavor3,085,908
5XTO3,014,649

Refining


Texas Gas Production


Texas Oil 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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