The Permian Basin |February 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- 343 (-9)
Total Rigs in Texas- 366 (-4)

Total Rigs in United States- 746 (-14)
Total U.S. Rigs 13% YTD

Top Oil Producer – Occidental

Permian Permitting Data
Permits Approved – 670

Basin Highlights

Budding Oil and Gas Company Drills New Wells in Permian Basin, Haynesville Shale

A newcomer to the Texas oil patch, Verde Bio Holdings has recently passed the 500 operated wells threshold. Completing wells in the Haynesville gas play and in the Permian oil play, the company is well-situated to capitalize on either hydrocarbon commodity. The company has acreage in Crockett County in West Texas and in Desoto Parish in East Texas which is offset of Ovintiv and Chesapeake acreage, respectively.

Permian Oil Production Could Surge By 500,000 Bpd This Year

Plains All American Pipeline LP remarked that they expect Permian Basin oil output to grow by 500,000 bpd in 2023 assuming roughly steady rig counts. The Permian Basin surpassed 2019 production records recently and seems to be one of the only major oil and gas basins in the United States that has outscored its 2019 production record. Most of Plains Pipelines long-haul systems, especially Cactus I and Cactus II, are experiencing progressively higher utilization, which is an indication of increased production in the basin.

Here is Where OIl and Gas Production is Increasing and Decreasing Across the US.

Most of the clusters of federal acreage in the United States are producing less oil presently than they were in 2019. Utah and Wyoming, two relatively meaningful oil and gas provinces, have experienced declines in production on federal acreage since 2020 and over the Biden administration, in large part due to the fact that oil and gas lease sales were halted for a time and because federal mineral royalties were hiked by 50%. New Mexico was the glaring exception. The New Mexican area of the Permian Basin is largely federal acreage and the BLM land produced 977,000 bbl/d–three times the amount that same area of land produced in 2018.

US Majors Not Immune to Permian Growing Pains

The rate of production growth in the Permian Basin is set to decline precipitously in 2023, but US majors Chevron and ExxonMobil have recommitted to long-term Permian production targets. Exxon reiterated a goal of producing 1 million boe/d from the Permian by the end of 2027, which will necessitate a 13% compound annual production growth rate. Chevron grew Permian production by 16% in 2022. Both of the aggressive production increases that Chevron and Exxon experienced in 2022 were driven largely by deep DUC inventories which are now exhausted.

Operators with Highest Permitting

Top Oil Producers—————————— –

Counties with Highest Permitting

Rig Count

Texas Oil Production

Texas Gas Production

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PETRO Engineering, PLLC via the following sources unless otherwise
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www.eia.gov
www.drillinginfo.com
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