The Permian Basin | April 2021
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 March)
Active Drilling Rigs in Basin- 224
Total Rigs in Texas- 212
Total Rigs in United States- 440
Total U.S. Rigs up 8% YTD
Permian Top Producers
Top Gas Producer – Cimarex Energy
Top Oil Producer – Diamondback Energy
Permian Permitting Data
Permits Approved – 826
BP to end Permian flaring by 2025 with $1B+ pipeline network
BP Plc will spend about $1.3 billion to build a network of pipes and other infrastructure to collect and capture natural gas produced from oil wells in the Permian Basin. Dave Lawler, the chairman of BP America Inc said “We will be producing oil and gas for decades, but it will be a certain kind of oil and gas. It’s a highly profitable barrel and it’s a responsibly produced barrel.” The investment reflects the ever-growing pressure on the industry to reduce its carbon footprint and contributions to climate change. At the end of March, BP announced it had lowered its Scope 1 and 2 emissions, those associated mostly with production, by 16% in 2020.
Pioneer Natural Resources acquires DoublePoint Energy
Pioneer Natural Resources completed its second major acquisition of another shale producer in less than 6 months. Analysts have noted that in addition to being the US shale sector’s highest-priced acquisition of the year so-far, it is also the first to come after US crude prices have held a steady position in the $60/bbl range. DoublePoint, a private equity-backed operator, is producing around 100,000 BOE/D; the two companies did not provide a breakdown of actual oil and gas volumes. “Pioneer is now the largest producer in the Permian Basin, providing us significant benefits of scale,” Scott Sheffield, Pioneer’s CEO, noted during a webcast on the deal’s announcement. “We now significantly dominate the Midland Basin, producing over twice as much as the nearest peer,” he added. In describing the deal as a “bolt on” transaction, Pioneer highlighted that much of DoublePoint’s acreage runs adjacent to its own and is “largely undeveloped.”
Chevron Offers $100 Million in Permian Basin Acreage as M&A Heats Up
Chevron Corp. is offering to sell about 73,000 acres (29,540 hectares) of oil and gas properties in New Mexico, according to documents viewed by Reuters, as oil firms accelerate divestitures in a rebounding oil market. Chevron set a May 20 deadline for bids on acres holding more than 1,000 producing wells with $1.1 million in combined monthly revenue, according to a sales document. The properties could fetch about $100 million, according to one analyst who reviewed the parcels but declined to be named because he was not authorized to speak on the matter. The wells are in conventional fields in the Permian’s Central Basin, not in the more desirable Midland and Delaware areas, the person said.
Operators with Highest Permitting (April)
|Add. Permits |
Counties with Highest Permitting (March)
Top Gas Producers (2020 cum)——————————–Top Oil Producers (2020 cum)
|5||Endeavor Energy||5||Endeavor Energy|
Texas Oil Production
Texas Gas Production
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