The Permian Basin |March 2023
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 the United States- 748 (-1)
Total U.S. Rigs 7.8% YTD
Top Oil Producer – Occidental
Permian Permitting Data
Permits Approved – 1,012
Mike Sommers, current President and CEO of the American Petroleum Institute, said in a recent interview that the Permian Basin is “one of the most important parts (of) the world right now…”. Citing the strategic value of American energy independence and how that is predicated largely on Permian Basin production, Mr. Sommers explained the need for civilian infrastructure upgrades in the area in order to help attract and retain a skilled workforce to operate West Texas oil fields.
Youth climate activists in El Paso, Texas have assisted in putting forth a municipal measure to ban the use of municipally-controlled water for hydraulic fracturing operations outside of the city’s limits. Other concurrent legislation is advocating for the more rapid purchase of solar and wind infrastructure near El Paso, in conjunction with the city’s goal to derive 80% of its electricity from carbon-free sources by 2030. The article cites a survey that concludes that in 2019, 72 billion gallons of fresh water were used in the Texas side of the Permian Basin for hydraulic fracturing operations–a 2,400% rise from 2010.
Activity in the Permian Basin and other major American oilfields has and may continue to slacken. With the recent collapse of natural gas prices from $7/mcf to $2/mcf and with the oil prices dipping into the $70/bbl region, income has been reduced considerably. Additionally, nearly all of the oilfield cost inputs have continued to get more expensive, with average CAPEX per well increasing again for the ninth straight quarter in the Permian.
Michelle Lujan Grisham, the Governor of New Mexico, has championed regulations to reduce routing flaring in New Mexico. Under her administration, the New Mexico Energy, Minerals, and Natural Resources Department created a rule that operators must achieve a 98% gas capture rate by 2026. Another goal that has been implemented is reducing New Mexico’s GHG emissions by 45% by 2030, an action that will require the participation of New Mexico’s oil and gas industry.
Operators with Highest Permitting
Top Oil Producers—————————— –
|Rank||Company||January Production (MBO)|
Counties with Highest Permitting
Texas Oil Production
Texas Gas Production
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