Rig count, oil production rises in Permian Basin

by Talk Business & Politics staff ([email protected]) 172 views 

Crude oil production in the Permian Basin is projected to rise to 2.4 million barrels per day in May, according to the U.S. Energy Information Administration. Between January 2016 and March 2017, production in the basin has risen in every month except for three, “even as domestic crude oil prices fell.”

Production in other regions declined throughout most of 2015 and 2016. As oil prices have risen, “the Permian continues to be attractive to drillers, as reflected in rising rig counts,” according to the EIA. As of April 21, the basin had 340 rigs, “or 40% of the 857 total oil- and natural gas-directed rigs operating in the United States.” In late 2014, the number of rigs in the basin rose to a high of 568, before falling to 134 by spring 2016.

The Permian Basin includes more than 75,000 square miles in 43 counties of western Texas and southeastern New Mexico. “More than half of the rigs that have been added in the Permian are concentrated in just five counties: Reeves, Loving, Midland and Martin counties in Texas and Lea County in New Mexico,” according to the EIA. In November, oil production from the five counties reached 882,000 barrels per day, accounting for about 42% of total production (2.1 million barrels per day) in the Permian Basin.

In a portion of the basin in Texas, the amount of recoverable resources was estimated to “exceed 20 billion barrels of oil, 16 trillion cubic feet of natural gas and 1.6 billion barrels of hydrocarbon gas liquids,” according a November survey by the U.S. Geological Survey. This estimate for recoverable resources is “higher than any previous USGS assessment of tight oil resources in any domestic resource basin.”