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Permian Basin Overview

Web Page Index

Nonconventionals
CO2 EOR
Permian Basin Drilling Activity
Permian Acreage Positions
Example 24 Well, Midland Basin Development Project : casing design,
well path diagram, production performance of the project, detailed frack log history

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 Click For Larger Image	Permian Basin: SubBasins and Geological Features Click For Larger Image
Permian Basin: Deep Structure Map Click For Larger Image	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 nonconventionals 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"). For reference, we also include a regional stratigraphic chart.

Click For Larger Image	Click For Larger Image

Click For Larger Image	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.
Click For Larger Image	The growth in natural gas output has been just as impressive.
Permian Oil, Gas, and NGL Pipelines: Recent, In-Process, and Potential Click For Larger Image	Permian Basin: Natural Gas Processing Infrastructure Click For Larger Image

The rapid, voluminous growth of both oil and gas output has led to a major infrastructure buildout to gather, process and transport the commodities to markets. The markets are primarily on the Gulf coast and increasingly beyond in Europe and Asia. To the left is a map showing the various pipelines that have either been recently put in service, are being constructed, or are being proposed.

The two sets of defining technologies most responsible for returning fortune to the Basin are horizontal drilling/multistage fracing and CO2 EOR. The application of these two technological advances has not only halted the long term decline in oil production, but led to the dramatic oil production increase apparent in the previous chart.
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Nonconventional Plays: Permian Basin

Of these two technological forces, horizontal drilling/multistage fracing (hdmsf) is the one most responsible for the reversal of fortune. Over the past several years, several significant horizontal plays have emerged. The figure to the right is a map, circa early 2017, of the Permian Basin with the estimated number of rigs active at that time in each county listed in black. The large majority of these rigs are drilling nonconventionals, tight oil wells, with the more prominent of such plays outlined and labeled on the map. Of these plays, the upper Wolfcamp in both the Midland and Delware subbasins is receiving the most attention. That said, drilling for both the Spraberry and the Bone Springs is also quite active, with local hotspots in both the Leonard 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 and titled, "Delaware Basin: Potential Well Stack around State Line," is an illustrative 3D diagram we developed to demonstrate the potential for stacking.

Delaware Basin: USGS Light, Tight Oil Resource Potential Click For Larger Image	Midland Basin: USGS Light, Tight Oil Resource Potential Click For Larger Image
If the Permian Basin were a standalone county, it's nonconventional oil resources would place it eighth in the world in terms of its oil potntial. Click For Larger Image	If the Permian Basin were a standalone county, it's nonconventional gas resources would place it sixth in the world in terms of its gas potential. Click For Larger Image

Delaware Basin: Potential Well Stack Around State Line

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

As mentioned previously, the Wolfcamp is currently the main nonconventionals target in the Permian. To provide a sense as to the nature of the formation, we developed a 3D map of the Wolfcamp structure, shown here.

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 EVAL, our proprietary economic analysis program. We have over 500 such assessements for the Permian oil nonconventionals, starting in 2010, which provides detailed insights on not only the economic performance of the nonconventional 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 nonconventionals. 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 at different scales of development including, individual wells, projects, regions, companies etc. and cross compare against different development concepts, e.g. 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 migration 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 hi-light just two alternatives. As a result, 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 feature applies the assessed risk at the appropriate point in the project life cycle, e.g. exploration, delineation, development and carries that risk through to the expected economics.

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CO2 EOR: Permian Basin Overview

Selected USA CO2 EOR Regions Click For Larger Image	P ermian CO2 EOR Overview >Click For Larger Image
CO2 EOR Oil Production for the Permian Basin Click For Larger Image

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Permian Basin Drilling Activity Overview

Approx. Reported Permian Basin Horizontal Rig Activity Click For Larger Image	Approimate Horizontal Rig Count for Several Significant Tight Oil Play Areas Click For Larger Image
Drilling Rig Activity In the Permian in March 2019 Click For Larger Image	US Onshore Drilling Activity Heat Map (March 2019) Click For Larger Image
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Acreage Positions As Reported By Operating Companies (The Energy Consulting Group makes no representation as to accuracy)

Diamondback: Reported Permian Acreage Position as of early-2019 Click For Larger Image	Occidental: Reported Permian Acreage Position as of early 2017 Click For Larger Image
Apache: Reported Permian Acreage Position as of late 2016 Click For Larger Image	Chevron: Reported Permian Acreage Position as of March 2019 Click For Larger Image

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Example of a Large, Nonconventional Development Project in the Permian Basin
The wells in this example were drilled into the Spraberry formation in Martin Co,, TX, which is at the northern end of the Midland Basin, nonconventional development region.

Permian Basin: Nonconventional Oil Footprint, Martin Co, TX Click For Larger Image	Illustrative Permian Example: Oil and Gas Production Performance For One 24 Well Project Click For Larger Image
Permian Basin: Reported Casing Design for a Horizontal, Multistage Fracked Well Click For Larger Image	Permian Basin Reported Directional Survey for a Horizontal, Multistage Fracked Well Click For Larger Image
Permian Basin: Excerpt From Frack Log For 50 Frack Stage Horizontal Well Click For Larger Image	Energy Consulting Group data includes the operational, and performance history for literally thousands of wells across the Permian Basin. As illustrated by this example, this data includes casing designs, well tests, directional surveys, drilling/completion costs (AFE and actual), production performance, and detailed frack data (number of stages, perforation depths, frac volumes, pressures, etc.) The full frack log from which we pulled the summary to the left is at this link.
Permian Basin: Nonconventional Oil Footprint, Loving Co, TX

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