Much larger than Eagle Ford and once thought to have reached peak
production, new technology has brought us full circle back to the
Permian Basin in Texas and New Mexico, where the recent shift to
horizontal well drilling has rendered this play the unexpected ground
zero. Determining where the next real oil boom will be depends largely on
following the technology, and while the Permian Basin has been slower
than others to switch from vertical to horizontal well drilling,
horizontal has now outpaced vertical, and investors are lining up to get
in on the game. Until about 12 years ago, virtually all wells in the Permian were
vertical. As of last fall, however, horizontal and directional rig
counts — meaning, non-vertical drilling rigs — have now begun to exceed
vertical, according to RBN Energy. But what they’re also looking for are developers who are seeing
strong economics in both vertical and horizontal wells. It’s all about
balance, and this co-mingling of multiple zones — with the ability to
complete both horizontal and vertical wells economically — is the best
bet for investors. The Permian Basin now boasts the largest rig count in the U.S. Just
this week, the number of rigs exploring for oil and natural gas in the
Permian Basin increased to 560, according to the weekly rig count report released July 10 by Houston-based oilfield services company Baker Hughes. What’s more, according to Bernstein Research, the Permian Basin will
top the charts for North American spending growth in 2014, with an
amazing 21 percent increase. And 2013 was already a stellar year for the
Permian. Permian production last year increased by 280,000 boe/d to 2.3
million boe/d, comprised of 1.4 million b/d of oil and 5.3 bcfd of gas,
according to the U.S. Energy Information Administration. This technology has changed the way we think about the Permian Basin,
once the darling of American oil production that became lost in the
shadow of Eagle Ford and Bakken. While Eagle Ford and Bakken were viewed
as the “bigger plays” at the start of the unconventional boom in the
U.S., due to the fact that new technology debuted here harder and
faster, the Permian is back and bigger than ever...more
“The Permian Basin is much larger than the Eagle Ford play, and it
also contains over 20 potentially productive zones, while Eagle Ford has
only one zone,” Parker Hallam, CEO of Crude Energy — a small-cap company, not publicly traded, operating in the Permian, told Oilprice.com.
Issues of concern to people who live in the west: property rights, water rights, endangered species, livestock grazing, energy production, wilderness and western agriculture. Plus a few items on western history, western literature and the sport of rodeo... Frank DuBois served as the NM Secretary of Agriculture from 1988 to 2003. DuBois is a former legislative assistant to a U.S. Senator, a Deputy Assistant Secretary of Interior, and is the founder of the DuBois Rodeo Scholarship.
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