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Permian Basin Overview


Table of Contents

Non-Conventional
CO2 EOR
Permian Basin Drilling Activity

The Permian Basin is located in west Texas and southeastern New Mexico, and  has been producing oil commercially since 1921. To date it has produced over 29 billion barrels of oil and 75 trillion cubic feet of gas, and it is estimated by the industry to contain recoverable oil and natural gas resources exceeding that which has been produced since that first well.  
 
Permian Basin Index Map
Permian Basin Index Map
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Permian Basin: SubBasins and Geological Features

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Permian Basin:  Deep Structure Map
Permian Basin:  Deep Structure Map
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The map to the left provides a sense of the subsurface relief that underlies many of the names the industry uses for different parts of the Permian Basin.  This particular map is a deep structure map, but as is evident in the maps of the non-conventional Wolfcamp below, much of this relief is conserved at shallower depths.

The oil and gas is contained in hundreds of distinct plays and produced from over 7000 oil and gas fields and  (some of which are shown on the map titled, "Permian Basin Oil and Gas Plays").

 

 

 

However, despite the impressive volumes of oil remaining to be recovered from these fields, in the last decades of the 20th century Permian oil production was flat to declining. But, operators have successfully developed, tested and applied new technologies to stem and reverse this trend, and are even now taking oil production to new heights.

 

The two sets of defining technologiesost responsible for returning fortune to the Basin are horizontal drilling/multistage fracing and CO2 EOR. These two technological advances have not only halted ┬áthe long term decline in oil production, but led to dramatic oil production increases apparent in the previous chart.  Through my years as a petroleum engineer and independent consultant I have gained experience and expertise in both areas.

Non-Conventional Plays: Permian Basin




The more current of these two technological forces is horizontal drilling multistage fracing (hdmsf). Over the past five years, several significant horizontal plays have emerged.  The figure to the right is a map of the Permian Basin with the estimated number of active rigs drilling in each county listed in black.  The large majority of these rigs are drilling non-conventional, tight oil wells, with the more prominent such plays outlined and labeled on the map.  Of these plays, the upper Wolfcamp play in both the Midland Basin and the Delware Basin parts of the Permian are receiving the  the most attention.  That said, drilling for both the Spayberry and the Bone Springs is  also quite active, with local hotspots in both the Leanoard and Avalon shales. 

An attactive feature for the Permian shale oil industry is that in many areas, the plays are stackable meaning operators may be able to develop more that one formation from a single well pad.  The figure below left titled, "Delware Basin:  Potential Well Stack around State Line is a illustrative 3D diagram we developed to illustrate the potential for stacking.. 

 

 

 
Delaware Basin:  Potential Well Stack Around State Line
Delaware Basin:  Potential Well Stack Around State Line





















Click here for full size version of the above 3D graphic.
 

As mentioned previously, the Wolfcamp is currently the main target non-conventional formation in the Permian.  To provide a sense as to the nature of the formation, we developed a 3D map of the Wolfcamp structure.  A version of this map with an overlay of county level rig activity, and a sampling of well test performance.

Permian Basin:3D Wolfcamp Structure Map Relative to Reported Rig Activity
Permian Basin:3D Wolfcamp Structure Map Relative to Reported Rig Activity
 





















Click here for full size version of the above 3D graphic


To the left is an example of our economic comparison map.  The well level economics reflect well performance \ (IP's, decline curves and EUR) as communicated by individual companies for different plays, which we analyzed using our proprietary economic analysis program.  We have over 400 such assessements for the Permian oil non-conventionals, starting in 2010, which provides detailed insights on not only the economic performance of the non-conventional plays in the Permian Basin, but also allow us to investigate questions regarding rig and well productivity growth, impact of changes in technology, how much oil the basin is likely to produce at different oil prices, and which firms are best positioned to exploint the non-conventionals.  And, yes, we do realize that many of the answers in the map have been removed.  If interested in the map with all the blanks filled in please contact us at insight@energy-cg.com.

A quick note about the economic analysis program we have developed,  which in essense is our Aries equivalent.  This program provides us the opportunity to quickly assess with a high degree of granularity the economics for a specific well, project, region, company etc. and cross compare against different development concepts, eg incremental economics of 1000 lbs/ft of sand vs going with 2000 lbs/ft. Over the years we have used this tool to track the evolution of different technologies, such as the evolution of the domestic natural gas industry away from tight gas developments and towards shale gas, or more strategically, whether it makes more sense (economically) to invest in the shales vs deep water or oil sands, to specify just two alternatives. As a results we have literally thousands of economic runs of different situations be it in the Marcellus, Permian, Canada tight gas or oil sands, deepwater Angola, North Sea, China shale gas, etc.

The sophistication of the program comes from its ease of use, scalability and risk handling.  Its ease of use is grounded in it being spreadsheet based, which is familiar and intuitive, meaning a new user can be up and running in minutes.  Its scalability is associated with it being able to quickly be configured to evaluate the economics of any size project, be it a single well, a pad, a year long campaign of hundreds of wells, or an integrated deep water development.  The risk handling featers applies the assessed risk at the appropriate point in the project eg. exploration, delineation, development and carries that risk through to the expected economics. 

 

CO2 EOR: Permian Basin Overview

 


Selected USA CO2 EOR Regions
Selected USA CO2 EOR Regions
Permian CO2 EOR Overview
Permian CO2 EOR Overview
CO2 EOR Oil Production for the Permian Basin
CO2 EOR Oil Production for the Permian Basin
 

 

Permian Basin Drilling Activity Overview

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Approx. Reported Permian Basin Horizontal Rig Activity

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