The Permian Basin | August 2023

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- 317 (-3)
Total Rigs in Texas- 312 (+5)
Total Rigs in the United States- 630 (-2)
Total U.S. Rigs 17.5% YTD

Top Oil Producer – Occidental

Basin Highlights

Mewbourne Oil to pay $5.5 Million Penalty to Settle Pollution Claims

In order to resolve claims regarding alleged air pollution at its oil and gas wells in New Mexico and Texas, Mewbourne Oil has agreed to pay a $5.5 million penalty, according to the U.S. Environmental Protection Agency. In a consent decree submitted with a complaint in federal court in New Mexico, the Tyler, Texas-based oil and gas company admitted its responsibility to pay the fine. In the complaint, the EPA and the New Mexico Environment Department claimed that during flyover inspections of Mewbourne’s oil and gas wells in the Permian Basin in 2019, 2020, and 2022, they had discovered numerous Clean Air Act violations. According to its website, Mewbourne is one of the biggest privately held oil and gas companies in the United States and manages more than 2,100 oil and gas wells in Texas, New Mexico, and Oklahoma. The U.S. government and the state of New Mexico will split the $5.5 million fine equally.

Permian Resources to Acquire Earthstone Energy in All-Stock Transaction

According to a definitive agreement that was announced by Permian Resources Corporation and Earthstone Energy, Inc., Permian Resources will acquire Earthstone in an all-stock deal worth roughly $4.5 billion, including Earthstone’s net debt. Each share of Earthstone common stock will be exchanged for a fixed number of 1.446 shares of Permian Resources common stock, according to the terms of the deal. With over 400,000 Permian net acres, pro forma production of about 300,000 Boe/d, and an improved free cash flow profile to boost returns to shareholders, the transaction strengthens Permian Resources’ position as a leading Delaware Basin independent E&P.

Ring Energy expands Permian basin assets with Founders Oil & Gas acquisition

The assets of Founders Oil & Gas IV, LLC’s Central Basin Platform (“CBP”) have been fully acquired by Ring Energy, Inc. In the Permian basin in Ector County, Texas, Founders’ CBP operations are concentrated on the development of roughly 3,600 net acres that are comparable to Ring’s CBP assets purchased in 2022 from Stronghold Energy Operating II, LLC. Ring’s ability to pay off debt is accelerated by the acquisition, which is immediately accretive to production, reserves, and adjusted free cash flow. Additionally, the acquisition expands Ring’s inventory of drilling sites with low risk and high rates of return, giving Ring more flexibility in how its capital is allocated. Mr. Paul D. McKinney, Chairman of the Board and Chief Executive Officer, commented, “This transaction complements our conventional-focused CBP asset position in the Permian basin with assets that are similar to the CBP assets we acquired in the third quarter of last year. Our near-term focus is to quickly integrate these operations into our business, while at the same time formalizing detailed development plans for the acquired assets.”

Operators with Highest Permitting

Top Oil Producers—————————— –

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