The Permian Basin | September 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- 346 (+6)
Total Rigs in Texas- 365 (+6)
Total Rigs in United States- 769 (+10)
Total U.S. Rigs – 42% YTD

Top Producer by BOE – Pioneer

Permian Permitting Data
Permits Approved – 825

Basin Highlights

The Rise of Associated Gas in the Permian vs. Elsewhere

The Permian Basin currently produces over 15 Bcf/d of associated gas and is on course to produce 19 Bcf/d by 2024. Up from 4 Bcf/d in 2015, the Permian’s rapid increase in associated gas production has offset associated and dry gas production declines in a number of other basins. The Gulf of Mexico, for instance, output 14 Bcf/d at its peak and is now down to 2 Bcf/d. Commodities expert Carol Johnston estimates that 17 Bcf/d of new gas production every year from 2023 to 2025 will be required to offset the natural decline in gas production.

Cheniere Energy JC to Build New 1.7 Bcf/d Natural Gas Pipeline in Texas

The Agua Dulce/Corpus Christi (ADCC) pipeline, currently being built by subsidiaries of Whistler Pipeline LLC and Cheniere Energy Inc., will be a 43-mile, 42-inch pipeline connecting the terminus of the Whistler Pipeline to Cheniere’s Corpus Christi liquefaction facility. The Whistler Pipeline (also 42 inches) connects the prolific Permian Basin to Agua Dulce–a 450 mile distance. This line will transport 1.7 Bcf/d or 45 million tonnes per annum (mtpa) with room to scale. An 85-mile, 36-inch pipeline connects this midstream infrastructure to the Midland Basin.

Sources: Mabee Family Might Sell 70K-Acre Permian Ranch

The large 70K-acre Mabee Ranch in the north part of the Midland Basin might be sold in the near future. The family of the late John Mabee, who purchased the ranch in 1932, has recently explored options on how to proceed with the massive ranch. The ranch is expected to generate $575 million of free cash in 2023 from its oil and gas royalties. John and Lottie Mabee’s foundation has paid out $1.3 billion since 1948 towards various philanthropic causes; a portion of the sale value would also go towards this foundation.

New Water Technology Ready for Deployment in Permian Basin

Encore Green has developed a desalination unit known as the NOMAD EXCEL. This unit is designed to make produced water suitable for agricultural purposes and then use the produced water to irrigate the relatively barren West Texas desert floor and, in so doing, capture carbon by locking it up in vegetation in West Texas. Each unit is capable of processing 2,000 bbl/d of produced water into ag-ready water. With record-low levels of water in the Western United States, this technology is poised to expand throughout all of the oil producing basins in the West.

Operators with Highest Permitting

Top Oil Producers—————————— –

Counties with Highest Permitting

Rig Count

Texas Oil Production

Texas Gas Production

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The information contained in this newsletter is provided by RARE
PETRO Engineering, PLLC via the following sources unless otherwise
noted:

www.eia.gov
www.drillinginfo.com
www.bhge.com
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