The Permian Basin’s Has a $900-B Gift to the World of Energy
The Permian Basin is the gift that keeps on giving.
One portion of the giant field, known as the Wolfcamp Formation, was found to hold 20-B bbls of Crude Oil trapped in 4 layers of shale beneath the desert in West Texas, the US Geological Survey (USGS) said in a report last Tuesday.
That’s almost 3X larger than North Dakota’s Bakken play and the largest US unconventional Crude Oil accumulation ever assessed. At current prices, that Crude Oil is worth almost $900-B.
The estimate lends credence to Pioneer Natural Resources Co. (NYSE:PXD) CEO Scott Sheffield’s assertion that the Permian’s shale endowment could hold as much as 75-M barrels, making it 2nd only to Saudi Arabia’s Ghawar field. Pioneer has been increasing its production targets all year as drilling in the Wolfcamp produced bigger gushers than the Irving, Texas-based company’s engineers and geologists forecast.
Crude Oil explorers have been flocking to the Permian Basin in West Texas and New Mexico to tap deposits so rich that they generate profits despite the 2.5-year slump in crude prices. A race to lease land in the Permian has been the main driver of a surge of deals in the energy patch and the industry’s main source of good news.
Although the Permian has been flowing Crude Oil since the 1920’s, its multiple layers of Crude Oil-soaked shale remained largely untapped until the last several years, when intensive drilling and fracturing techniques perfected in other US Shale regions were adopted.
The Wolfcamp Shale, which is as much as 1 mile thick in some places, has been one of the primary targets of shale Oil drillers.
ConocoPhillips, (NYSE:COP) the world’s largest independent Crude Oil producer by market value, increased its estimate for the size of its Wolfcamp holdings on 10 November to 1.8 from 1-B bbl last year.
A day earlier, Concho Resources Inc’s (NYSE:CXO) CEO Timothy Leach told investors and analysts on a conference call that 2 recent wells it drilled in the Wolfcamp were pumping an average of 2,000 BPD each.
Diamondback Energy Inc. (NASDAQ:FANG) said last week that it has been drilling 10,000-foot sideways wells in the Wolfcamp. Production from the wells has been as high as 85% Crude, according to the Midland, TX-based explorer.
For Apache Corp. (NYSE:APA) a slice of the Wolfcamp and another Permian layer known as the Bone Spring are major components of the 3-B bbl Alpine High discovery that the company announced in September. CEO John Christmann called Alpine High “a World Class resource” during a 7 September presentation at a Barclays Plc conference in New York.
The Wolfcamp shale also holds 16-T cf of Nat Gas, and 1.6-B bbl of NGL (Nat Gas liquids), the USGS said in a statement last Tuesday.
Have a terrific holiday with friends, family and good food
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