The Permian Basin | October 2021
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
Active Drilling Rigs in Basin- 271 (+8)
Total Rigs in Texas- 254 (+11)
Total Rigs in United States- 550 (+22)
Total U.S. Rigs 83% YTD
Top Producer by BOE – Pioneer
Permian Permitting Data
Permits Approved – 665
Rattler Midstream LP, a subsidiary of Diamondback Energy, Inc. and a private affiliate of an investment fund, completed a joint venture with West Texas Gas, Inc. and its affiliates to acquire a majority interest in a Midland Basin gas gathering and processing company. Rattler paid about $104 million in cash to purchase a minority stake in the joint venture. The assets of the joint venture largely consist of an interconnected gas gathering infrastructure and six major gas processing plants serving the Midland Basin, with a total processing capacity of 925 MMcf/d with plans for additional gas collection and processing expansions.
The Acquired Assets consist of about 2,600 core net royalty acres (“NRAs”) evenly split between the Delaware and Midland Basins, with the majority of the holdings in Texas’ Loving, Reeves, Upton, and Midland Counties, as well as New Mexico’s Lea County. On the Acquired Assets, there are roughly 250 producing horizontal wells and over 650 undeveloped locations. The Acquired Assets generated $10.8 million in LTM cash flow and contain top operator exposure to Devon, Pioneer, and Endeavor. Elk Range used a mix of its equity commitment from NGP Royalty Partners, LP and its credit facility with Texas Capital Bank to fund the acquisition.
With a current enterprise value of $9 billion, Combination is the Delaware Basin’s largest integrated midstream company. The combined business earns a healthy mix of money from midstream gathering and processing and long-haul pipeline transportation, accounting for around 65 percent and 35 percent of expected EBITDA in 2022, respectively. In the Delaware Basin, the company will operate about 2 Bcf per day of newly constructed cryogenic natural gas processing facilities, with more than 850,000 acres dedicated to midstream activities on a fee-based, long-term basis.
According to a securities filing, Pioneer Natural Resources, a U.S. shale oil company, lost $501 million on oil and gas hedging in the third quarter, as energy prices surged to multiyear highs. After recovering from last year’s falls, U.S. crude futures are trading at $83 per barrel, and natural gas contracts are selling near $6 per million British Thermal Units. Because of the price increase in the second half, producers who hedged at lower prices are expecting losses this quarter. Pioneer’s hedging losses for the nine months ended Sept. 30 totaled $2.02 billion, according to the filing.
Operators with Highest Permitting
Top Producers By BOE—————————— –
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Counties with Highest Permitting
Texas Oil Production
Texas Gas Production
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