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Permian poised for increased pumping

Permian poised for increased pumping: an oil rig in Texas

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Market Briefing
Published: September 2013
Pages: For full details, please email keithw@cmsinfo.com
Tables: For full details, please email keithw@cmsinfo.com
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Revenue and investment opportunities in the Permian Basin are becoming increasingly difficult to ignore. This sedimentary basin straddles the Texas/ New Mexico border, so named as it has one of the world's thickest deposits of rocks from the Permian period, and is roughly 250 miles and 300 miles long.

The Permian Basin gives its name to a large oil and natural gas producing area, part of the Mid-Continent Oil Producing Area. Total production for that region up to the beginning of 1993 was over 14.9 billion barrels.

The Permian accounts for 22% of drilling activity in America, and although a mature region, new hydraulic fracturing technologies and horizontal wells have allowed operators to return and unlock vast resources with strong growth set to continue.

R. Michael Haney, Douglas-Westwood Houston writes: "Major players ConocoPhillips, Apache Corp and Chevron are already well positioned. The Permian is producing one million barrels of oil per day and total rig count has risen from 51 in 1999 to 442 units".

He adds: "The opportunities are substantial due to "stacked-pay zones" layered on top of each other, allowing producers to tap oil at varying depths from a single vertical well. The Bonespring and Wolfcamp plays epitomise this idea. Together, the two could pump one million barrels of oil per day by 2018. Investment in the Bonespring is expected to reach $145 billion, while $75 billion Capex is expected on the Wolfcamp. And then there’s the Cline".

In addition to drilling deeper and using more fracturing stages, enhanced recovery techniques are gaining share, including waterflooding and advanced injection services. Haney suggests that now might be the time to consider focusing in the Permian.


Keith Wallace

See also:

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