Permian Basin News Pulse November 2022

Posted: December 15, 2022

The Permian Basin |November 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 (+1)
Total Rigs in Texas- 366 (-8)
Total Rigs in United States- 776 (+7)
Total U.S. Rigs 34% YTD

Top Producer by BOE – Pioneer

Permian Permitting Data
Permits Approved – 417

Basin Highlights

As Pipelines Fill, Natural Gas Flaring Set to Rebound in Permian Basin

Oil production in the Permian is now eclipsing 2019 records. Gas production in the basin, for several months, has been higher than pre-Covid levels. This glut of gas has reversed some of the positive trend in flaring reduction. It is expected that takeaway capacity in the Permian will be greatly increased when the Matterhorn Express pipeline is completed in Q3 of 2024. This 580-mile, 42-inch pipeline will be able to transport 2.5 Bcf of gas per day out of the Permian basin and will significantly contribute to alleviating takeaway capacity strains in the basin.

Diamondback Strikes $1.55B Deal to Bolt on More West Texas Oil, Gas Assets in Permian

In a partly-stock, partly cash deal, Diamondback has agreed to purchase Lario Oil and Gas Company’s Midland Basin assets. This deal provides Diamondback with 150 gross well locations (PUDs) and 50,000 boe/d of existing production. Lario’s Permian acreage totals about 83,000 acres, 15,000 of which are in the “core” part of the northern Midland basin. Diamondback is a Permian Basin pure-player that focuses largely on the Midland basin. 

Permian Takeover: Multinationals in the Permian Basin

Just a few of the leading multinational companies that operate in the Permian (Exxon, Oxy, Apache, Chevron, ConocoPhillips, and BP) control 62% of the acreage in the basin between them. Despite controlling nearly two-thirds of the acreage in the basin, these corporations will contribute about one sixth of the production growth in the basin through 2025. Several of these companies have bought more heavily into the basin in recent years (Exxon, ConocoPhillips) while others have had acreage positions in the Permian Basin long before the Shale Revolution began in the late 2000’s and early 20-teens (Chevron, Oxy).

Kimbell Royalty Partners, LP Announces $290 Million Permian Basin Acquisition in Cash and Unit Transaction

Kimbell Royalty Partners, LP, a publicly traded royalty trading company, announced an agreement to purchase 16 million net acres in 28 states, much of which is in the Texas Delaware Basin with some on the New Mexico side and some in the Midland Basin. Much of this acreage is operated by ConocoPhillips, EOG, and Occidental Petroleum. The firm is purchasing Austin-based Hatch Royalty LLC, commonly known as “Hatch Resources”.

Operators with Highest Permitting

2Mewbourne Oil45

Top Oil Producers—————————— –

RankCompanyNovember Production (MBO)

Counties with Highest Permitting

1Martin (TX)88
2Eddy (NM)51
2Lea (NM)51
4Reeves (TX)44

Rig Count

Texas Oil Production

Texas Gas Production

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