The Permian Basin | August 2022

Field Overview

Located in West Texas, the Permian Basin has been producing oil for over 100 years. The Permian leads the US in oil production and analysts estimate that there is 43 Gbbl of oil still in the Permian; 80% of reserves in the basin 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- 340 (-5)
Total Rigs in Texas- 359 (-10)
Total Rigs in United States- 759 (-3)
Total U.S. Rigs 51% YTD

Top Producer by BOE – Pioneer

Permian Permitting Data
Permits Approved – 670

Basin Highlights

Palisade Pipeline Launches Open Season for Permian Basin Produced Water Gathering Pipeline

On August 24, 2022, Palisade Pipeline LLC announced an open season on the new 97-mile Rail Runner, a new produced water takeaway pipeline that will be constructed along Highway 18 between Lea County and Winkler County. The open season is a period wherein producers and midstream operators will be given the opportunity to contract pipeline capacity for in the proposed produced water pipeline. The pipeline, upon completion, will be able to transport 500,000 bbl/d.

Earthstone Announces Closing of Titus Acquisition

Earthstone Energy closed on a deal with Titus Oil and Gas Production LLC to purchase the latter company’s New Mexico assets on August 10, 2022. Earthstone acquired 86 locations on 7,900 net acres in Eddy and Lea Counties for $575 million and 3.9 million Earthstone common shares. With this acquisition, Earthstone is now producing nearly 100,000 boe/d and will continue to “[build] scale through ‘accretive acquisitions and organic activity’”. Earthstone has increased the lending limits on its credit facility and has made plans to add another rig to the fleet in order to assist in the integration of the asset.

Diamondback Energy to Acquire Rattler Midstream in $575 Million Roll-up

On August 24, 2022, Diamondback Energy Inc. (FANG) completed the acquisition of the remaining units of Rattler Midstream (RTLR), a publicly-traded subsidiary of Diamondback Energy. Diamondback had previously owned 74% of Rattler Midstream and decided in May of 2022 to repurchase the remaining outstanding shares. Rattler Midstream’s assets included produced water gathering systems, oil gathering, non-operated interest in gas gathering and processing facilities, and non-operated equity stakes in oil and NGL pipelines throughout West Texas and Southeast New Mexico. Rattler Midstream has since been delisted from the Nasdaq.

Laredo Petroleum Sells Howard County Properties to NOG for $110 Million

Laredo Petroleum has entered into an agreement with Northern Oil and Gas to sell 1,650 net non-operated acres in Howard County in the Midland Basin with 1,800 boe/d of production for $110 million in cash. The deal includes 6.4 net producing wells, 1.6 wells in progress, and 8 net undeveloped locations. The acreage is operated by SM Energy and is the second-largest purchase by NOG of non-operated acreage in West Texas after last year’s $406.5 million acquisition of Veritas Energy Group’s nom-op Permian holdings.

Operators with Highest Permitting

Top Producers By BOE—————————— –

Counties with Highest Permitting

Rig Count

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