The Permian Basin | July 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- 334 (-7)
Total Rigs in Texas- 322 (-7)
Total Rigs in the United States- 664 (-10)
Total U.S. Rigs 12.4% YTD

Top Oil Producer – Occidental

Basin Highlights

Ring Energy Sells Delaware Assets, Eyes New Mexico Divestitures

In order to reduce debt, Ring Energy recently sold its non-core footprint in the Delaware Basin. Additionally, the Permian Basin E&P wants to sell off holdings in New Mexico. The Delaware assets that were divested have recent average production of about 240 boe/d (85% oil). Ring received around $7.8 million in net revenue from the deal. The agreement went into effect on March 1, 2023, during the second quarter. Ring is exploring to sell operated properties in New Mexico as it seeks to reduce debt and concentrate growth activities in its primary operating regions in Texas. As of the end of 2022, Ring’s holding in the Delaware Basin had more than 18,000 net acres and an average production of 279 boe/d, according to Securities and Exchange Commission filings.

EPA Announces $1.3 Million Settlement for Callon Permian LLC

A Consent Agreement and Final Order (CAFO) was issued by the U.S. Environmental Protection Agency to Callon Permian LLC for emissions from tanks, flares, and other equipment that the agency discovered using a helicopter fitted with a specialized infrared camera that locates hydrocarbon leaks. Callon LLC will take corrective action at thirteen of the company’s oil and gas facilities in the West Texas Permian Basin. This is expected to reduce emissions of volatile organic compounds (VOCs) by more than 1.2 million pounds. VOCs have a role in the creation of ozone (smog), which can lead to health issues like cancer, bronchitis, lung infections, and asthma. This settlement also contributes to the mitigation of climate change by reducing methane emissions by an estimated 4.6 million pounds. 

Sage Brush Lizard Proposed as Endangered Species

The U.S. Fish & Wildlife Service (USFWS) gave the domestic oil and gas industry an unwanted present that redirects Mr. Biden’s ongoing war on oil and gas to the Permian Basin. The Dunes Sagebrush Lizard has long been a source of worry and debate, but the USFWS has determined that it is necessary to classify it as an endangered species under the Endangered Species Act. Ben Shepperd, President of the Permian Basin Petroleum Association (PBPA), expressed surprise at the decision in an email. “We are extremely disappointed in the U.S. Fish and Wildlife Service (Service) decision to again list the Dunes Sagebrush Lizard as Endangered in the Permian Basin,” Shepperd said. “In spite of the successful conservation efforts on the ground for over a decade and that less than two years ago approving a conservation plan for the Lizard that all parties agreed would conserve habitat.”

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