Permian Basin News Pulse June 2022

Posted: July 19, 2022

The Permian Basin | June 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- 350 (+5)
Total Rigs in Texas- 365 (+9)
Total Rigs in United States- 756 (+16)
Total U.S. Rigs 56% YTD

Top Producer by BOE – Pioneer

Permian Permitting Data
Permits Approved – 504

Basin Highlights

Sand Prices up 150% In Half a Year

The deserts of the Permian are struggling to source sand necessary for frac operations. At the end of 2021 frac sand was at a high of $22 per ton. Now it averages $55. There have been delays, manpower shortages, and trucking bottlenecks for sand providers. The largest publicly traded producer of frac sand, US Silica Holdings Inc., has sold out, and its CEO has termed the competitive market “sandemonium.” Steve Brock and his fledgling sand-mining company, Nomad Proppant LLC, step in at that point. Fracing operators have relied on mined sand that is trucked to their locations across lengths of up to 100 miles since the beginning of the shale revolution more than ten years ago. Brock, the chief commercial officer of Nomad, wants to alter that paradigm. Nomad has created equipment that can travel straight to the frac wells, greatly decreasing the burden of freight expenses and the time-consuming trucking process. “We’re not brain surgeons here — all we’re doing is finding the best spots and washing and delivering the sand,” said Brock. “Frankly, that it took us this long to get here is pretty wild.”

New Regulations Could Hamper Drilling

The EPA is considering a new label for select areas of the Permian Basin that may discourage or impede oil and gas extraction there. The EPA might declare that some areas of the Permian Basin are in violation of the federal ozone air quality requirements, according to a regulatory notice. State regulators would have three years to come up with a plan to improve the air quality if the EPA did in fact declare some components to be in violation of the criteria. Their strategies can include preventing the construction of new industrial facilities from making the air quality even worse and ensuring that the equipment is in place at existing sites to maintain the air quality at acceptable levels. “Creating uncertainty on permitting and inserting unnecessary regulatory barriers will only negatively impact the production necessary to meet the needs of consumers,” Todd Staples, president of the Texas Oil and Gas Association, told Bloomberg.

Operators with Highest Permitting

2Highpeak Energy24
5Anadarko (OXY)20
Hyperlinks to available Reports

Top Producers By BOE—————————— –

ChangeRankCompanyProduction (mmBOE) (Jan-Feb/22)
3XTO Energy18.5
4COG Operating13.5
5Endeavor Energy13.0
Hyperlinks to available Reports

Counties with Highest Permitting


Rig Count

Texas Oil Production

Texas Gas Production

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