This article appeared yesterday in the New York Times: Land Rush in Permian Basin, Where Oil Is Stacked Like a Layer Cake. Exxon announced a $6.6 billion deal to buy the Bass family’s position in the Permian. Noble Energy agreed to buy Clayton Williams Energy for $2.7 billion, acquiring Williams’ 120,000 acres in the Permian. Anadarko announced it is selling its Eagle Ford shale leases to Sanchez Energy and Blackstone Group for $2.3 billion so it can concentrate on developing its leases in the Permian. SM Energy and EOG Resources are also selling assets in other fields to acquire larger interests in the Permian. According to the Times, there have been more than $25 billion of mergers and acquisitions in the Permian since June last year. The frenzy to acquire assets has become known as “Permania.” Companies claim they can make money at as little as $40/bbl. The reason: multiple “stacked” zones in the Permian, principally the Spraberry and Wolfcamp formations, allow multiple wells at different depths on each property.
The news this week is full of stories about the EIA’s new figures on the amount of recoverable oil in the Permian Basin. Unlike the rest of the country, the rig count in the Permian is rising and is now equal to all other rigs in the country combined. Permian oil production exceeds that from the Eagle Ford and the Bakken. And unlike all other plays, production from the Permian continues to grow. From EIA’s Drilling Productivity Report (click to enlarge):
Apache has announced that it is sitting on as much as 75 trillion cubic feet of rich gas and 3 billion barrels of oil under 352,000 acres in southern Reeves County. It calls its prospect the “Alpine High.” The hydrocarbons are in a 4-5,000-foot thick segment encompassing 2-3,000 locations in the Woodford, Barnett, and Pennsylvanian formations. So far Apache has drilled 19 wells, and nine have started producing. (Click on image to enlarge.)
Here is the power point presentation by Apache CEO John Christmann at Barclays CEO Energy-Power Conference on September 7: 2016-0907_Barclays_IR_Presentation_vFINAL
Here is the transcript of Christmann’s presentation: 2016-0907_Barclays_IR_Presentation_vFINAL
New federal data shows that the Energy Department expects drillers in the Permian Basin to push oil production in the shale play above 2 million barrels per day for the first time ever this November.
The U.S. Energy Information Administration’s monthly Drilling Productivity Report released Monday, which covers seven of the biggest shale plays in the country, projects production in the Permian to jump by 17,000 bpd this month. That increase would bring the play above the 2 million bpd mark. In December, the EIA expects the play to grow again by 11,000 bpd.
Ceres, a nonprofit focusing on climate change, water scarcity and sustainability, has issued a report, Hydraulic Fracturing & Water Stress: Water Demand by the Numbers, a Shareholder, Lender & Operator Guide to Water Sourcing. Here are some excerpts:
Data from the Energy Information Administration shows that Texas’ oil production is now the highest it’s been in thirty years. Texas crude production is now approaching 3 million barrels/day, a rate not seen since the 1960’s.
Below are EIA graphs showing production of oil from the Eagle Ford and the Permian Basin. It appears that Eagle Ford production rates will soon surpass production from the Permian.
EIA also calculates changes in the initial productivity of new wells in each field, a measure of the improved efficiency of rigs in the field. The graphs below show that new wells in the Eagle Ford are improving substantially; not so in the Permian. IP rates of Eagle Ford wells are now substantially higher than in the Permian.