• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 1 hour GREEN NEW DEAL = BLIZZARD OF LIES
  • 4 hours How Far Have We Really Gotten With Alternative Energy
  • 6 hours If hydrogen is the answer, you're asking the wrong question
  • 4 days Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
  • 5 days The European Union is exceptional in its political divide. Examples are apparent in Hungary, Slovakia, Sweden, Netherlands, Belarus, Ireland, etc.
  • 19 hours Biden's $2 trillion Plan for Insfrastructure and Jobs
  • 4 days "What’s In Store For Europe In 2023?" By the CIA (aka RFE/RL as a ruse to deceive readers)
Kazakhstan Eyes Expanded Routes for Oil Exports in 2024

Kazakhstan Eyes Expanded Routes for Oil Exports in 2024

Kazakhstan is planning to increase…

Bullish Oil & Gas Producers Remain Under-hedged

Bullish Oil & Gas Producers Remain Under-hedged

Standard Chartered sees oil and…

Oil & Gas 360

Oil & Gas 360

From our headquarters in Denver, Colorado, Oil & Gas 360® writes in-depth daily coverage of the North American and global oil and gas industry for…

More Info

Premium Content

These Numbers Suggest Yet Another Surge In The Permian

The Permian is the heart of modern oil and gas activity, with well over 300 rigs operating and tremendous growth set to continue. But companies need to continuously drill new wells to fuel this growth, which requires companies to obtain drilling permits from the Texas Railroad Commission (RRC).

The current shale resurgence has kept the Commission busy. The RRC has issued 6,262 drilling permits so far this year.

There are a total of 53 counties in the Railroad Commission’s Districts 7C, 8 and 8A, where the Permian lies. Drilling permits have been approved in all but five of these counties, though activity concentrates in a few key locations.


(Click to enlarge)

Source: RRC

Reeves County accounts for 15 percent of all Permian drilling

As might be expected, the heart of the Delaware basin portion of the Permian, Reeves County, is the most popular county in the Permian basin.

Since the beginning of the year the Railroad Commission has issued 974 permits in Reeves, which represents over 15 percent of all of the permitting this year. Midland County ranks second in permitting activity, with 725 permits issued since the beginning of the year. These two counties alone represent more than one quarter of all permitting activity in the Permian. The next three counties, Loving, Martin and Howard make up another quarter.

(Click to enlarge)

Source: EnerCom Analytics

Permitting activity has not followed any particular trend this year, and does not directly correspond to the oil price. The drop in prices in March did lead to decreased permitting activity in April, but as prices continued to fall in May and June permitting activity increased.

(Click to enlarge)

Source: EnerCom Analytics

Reeves County far surpassing previous activity

Virtually every Permian county saw permitting activity fall in 2014, as diving oil prices squeezed producers. Some counties, like Andrews and Upton, have not yet recovered to their previous highs. In the Delaware, however, activity is surging far beyond previous levels.

In Reeves County, for example, 769 permits were issued in 2014. This level has already been surpassed, and the year is far from over. If permitting continues at the same pace, over 1,450 permits will be approved for Reeves County in 2017.

(Click to enlarge)

Source: EnerCom Analytics

Midland basin has not returned to 2014 activity levels

In the Midland basin portion of the Permian, activity is increasing, but in most cases, has not reached the levels seen in 2014.

Midland County, where the largest number of Midland basin permits have been issued, is currently on track for nearly 1,090 permits in 2017, which would surpass the 1072 permits the Railroad Commission approved in 2014. Other counties are still well below 2014 levels, though.

(Click to enlarge)

Source: EnerCom Analytics

Delaware wells are the longest in Permian

Based on well permits from this year, wells are significantly longer in the heart of the Delaware than in the Midland basin.

The average well in Loving County has a total measured depth of over 12,900 feet, well above the overall average of 10,075 feet. Reeves and Ward counties are close behind, as the average permitted well in each county is longer than 12,000 feet. Among Midland basin wells, lateral length is roughly correlated with activity. Midland and Martin Counties, the most and second most popular Midland basin locations, have the longest and second-longest laterals of any counties in the basin.

(Click to enlarge)

Source: EnerCom Analytics Related: U.S. Taps Strategic Petroleum Reserve After Hurricane Harvey

352 companies have received permits

The Texas Railroad Commission has approved drilling permits from a total of 352 different private and public companies, ranging from supermajors to tiny private companies. Public companies make up most of the activity, however, as nine of the top ten companies are public. With a total of 377 drilling permits approved, Anadarko (ticker: APC) is the biggest operator in the Permian by permitting activity. Oxy (ticker: OXY) comes in second with 309, followed by XTO.

(Click to enlarge)

Source: EnerCom Analytics

Apache, Centennial and Anadarko foremost in Reeves County

Reeves County, the most popular county, also has a large number of different companies receiving permits. Apache (ticker: APA) ranks first among Reeves County companies, with 102 permits this year. Centennial Resources (ticker: CDEV) comes in a close second with 100, closely followed by Anadarko with 98. In total, there are 59 different private and public companies with drilling permits in Reeves County.

ADVERTISEMENT

(Click to enlarge)

Source: EnerCom Analytics

Pioneer, XTO, Endeavor active in Midland

Like Reeves County, Midland County has three primary operators, each of which has received around 100 drilling permits this year. Pioneer (ticker: PXD) and XTO (ticker: XTO) are tied for first place in the basin, with 100 drilling permits each. Privately-held Endeavor Energy Resources is in third place, with 98 wells. A total of 34 different companies have received drilling permits from the Railroad Commission in the Midland basin in 2017.

(Click to enlarge)

Source: EnerCom Analytics Related: How Long Can U.S. Refineries Remain Offline?

Anadarko dominates Loving County

In Loving County activity is more concentrated in the top companies, with two-thirds of all permits going to the top three. Anadarko dominates, with 181 drilling permits, or nearly one-third of all permits in the county. EOG and Shell (ticker: RDS.A) take another third, with 103 and 81 permits, respectively. Twenty-seven companies have received drilling permits in Loving County this year.

(Click to enlarge)

Source: EnerCom Analytics

This article is the first in a series. Check back next month for a new dive into the most popular basins in the U.S.

By Oil and Gas 360

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment
  • Kr55 on September 04 2017 said:
    Surge of drilling activity for sure. Not sure about a surge of production. Producers are finding that the treadmill of battling decline rates is far steeper than they originally thought, as much as they want to hide it from investors.
  • Guy minton on September 04 2017 said:
    Completions are at 63% of what we had at the same time of July as last year. Production tanked for a while last year at 5621 oil completions. This year it a whopping 3516. I am sure DUCs are increasing, but you can't get oil from a DUC, only completions produce oil, if they are lucky. Banjo about the Permian is out of tune.

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News