Permian Basin News Pulse May 2021

Posted: June 15, 2021

The Permian Basin | May 2021

Field Overview

Located in West Texas, the Permian Basin has been producing oil for over 100 years. It leads the US in oil production and estimates put 43 billion bbl of oil still in the Permian; 80% of those reserves 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 (End of May)

Active Drilling Rigs in Basin- 233
Total Rigs in Texas- 218
Total Rigs in United States- 457
Total U.S. Rigs up 52% YTD

Permian Top Producers

Top Gas Producer – Cimarex Energy
Top Oil Producer – Diamondback Energy

Permian Permitting Data
Permits Approved – 715

Basin Highlights

NM Taxpayers Could Fund the Clean Up Crew

A study released in late May highlighted the fact that some drillers have set aside only a small fraction of the money required to eventually clean up wells, pipelines and other associated infrastructure. Concern is growing over the vast number of wells in the state and who will be taking care of them when funds run dry. As it stands, New Mexico regulators require drillers to pay no more than $25,000 per well bond depending on how many assets the company operates, but as it turns out, the requirements are way too low. The released study estimates it would cost $8.38 billion to clean up  infrastructure on New Mexico’s state and private lands. The bonds put up by drillers only cover $200 million. The shortfall in funding for cleaning up pipe alone comes out to $211,000 per mile. If the state does decide to fully shift away from fossil fuels and reclaim the infrastructure, it is going to take lots of funding away from schools and state programs that benefited from oil and gas in the past.

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Empire Petroleum Closes on XTO Permian Assets

Tulsa based Empire acquired producing oil and gas assets in New Mexico from the ExxonMobil affiliate. The transaction adds about 48,000 acres of Permian lease hold adding 1,100 net boe/d production at ⅔ oil. Empire CEO Tommy Pritchard was pleased with the decision and said, “This acquisition is a terrific example of what Empire looks to manage in their assets: mature producing oil properties with predictable, long life production with significant upside potential.” According to estimates from the USGS, the assets are located within fields that have recoverable efficiencies of 40%. Empire paid $17.8 million for the XTO acquisition.

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Axis Energy Acquires Assets From Forbes Energy

Data-driven Axis Energy Services provides integrated solutions in well services and recently purchased the well servicing and coiled tubing assets of Forbes Energy Services. Forbes is a leading independent oilfield services contractor within the US. Axis will be acquiring many physical assets and crew to broaden the amount and type of services it currently offers to Texas. The combination results in a doubling of the Axis fleet capacity. To conform to ESG goals of the present, they plan to recycle any outdated and potentially unsafe equipment that it may acquire through the transaction. After this acquisition, Axis will become a top 4 well servicing company in the US through total rig count.

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Ranger Energy Services Acquire Patriot Completion Solutions

Wireline master Ranger recently acquired Patriot in an all stock deal. The synergies are immediately apparent as 22 wireline units and a number of Patriot team members will be assimilated into Ranger team. This should easily expand the geographical reach across the Permian basin. Patriot, a portfolio company of White Deer Energy, is excited to join the Ranger team as they feel Ranger has adequately demonstrated their knowledge and commitment to the wireline business. Ranger focuses on unconventional well completion and production operations, so this is likely not the last time you will hear of their impact on Texas.

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Operators with Highest Permitting (May)

Texas New Mexico

2COG702Ascent Energy27
3Ovintiv563Advance Energy Partners18
5Endeavor325Longfellow Energy14
Hyperlinks to available Q1 2021 Reports

Top Gas Producers (2020 cum)——————————–Top Oil Producers (2020 cum)

5Endeavor Energy5Endeavor Energy
Hyperlinks to available Q1 2021 Reports

Counties with Highest Permitting (March)


Rig Count

Texas Oil Production

Texas Gas Production

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