The Permian basin, now the nation’s most productive, is churning out ever-increasing volumes of crude. As of September 2014, the Permian is producing 1.7 million barrels per day (bpd). That is more than double the 850,000 bpd the area saw in 2007.
Even the more well-known oil producing basins around the country pale in comparison. The Bakken in North Dakota and Montana, which has received so much media attention, produces only around 1 million bpd. And the Eagle Ford, the Permian’s neighbor in South Texas, is responsible for 1.5 million bpd in production.
The Permian is king, even if the rest of the world doesn’t know it. Despite the lack of media attention, the oil and gas industry is fully aware of the Permian’s potential and they are heading there in droves.
Occidental Petroleum (NYSE: OXY) just broke ground on a major satellite office it is building in Midland, TX. The location is not random. Midland sits in the heart of the Permian basin and Oxy’s new office will house 600 employees. Texas Governor Rick Perry was on hand to inaugurate the occasion. “The men and women of the Midland area who will work at this facility will help Oxy continue to achieve their own great things, and in the process add their own stories to the ongoing tale of our state’s economic success,” Gov. Perry said at the event.
Oxy is the largest operator in the Permian and recently decided to move its headquarters from California to Houston in order to focus on Texas’ abundant oil and gas reserves. The success of the company’s acreage in the Permian was enough to convince the company that the Permian was the place to be.
It is not just big players like Oxy making strides in the Permian. Scrappy companies like Crude Energy LLC are also making progress. Crude Energy, a small independent oil and gas exploration company, is sitting on prime acreage in the Permian.
And Crude Energy just announced that it has participated in the spudding of a well in the Permian. Crude Energy’s White Wolf #1 prospect, based in the Permian is about 640 acres.
The well began spudding on September 11, targeting the highly prized Wolfcamp formation. The Wolfcamp is the principle reason that the Permian basin has become so productive. Crude Energy’s White Wolf #1 project will see drilling to a total depth of 9,200 feet, with the Lower Wolfcamp formation beginning at 7,200 feet. Along the way there are multiple payzones, and Crude Energy will also target the Cisco, Canyon, Cline, Strawn, Mississippian, Fusselman, Montoya and Ellenburger formations.
Drilling will take about 12 days to reach its lowest depth, and well completion and testing will take place in 30 days.
“As promised, Crude Energy is moving forward on the White Wolf #1 well, a potentially liquids rich prospect that we feel will fuel growth in our portfolio,” Crude Energy’s CEO Parker Hallam said in a statement. “We should have preliminary test data in a matter of weeks, and we are confident that White Wolf will pay off many times over.”
Crude Energy and its competitors in the basin have good reason to feel confident. As oil output in West Texas has quickly become one of the great American business success stories, the Permian basin is showing no signs of slowing down.
“You're definitely going to hit the 2 million barrel mark,” Bob Reeves, CEO of Athlon Energy (NYSE: ATHL), another Permian explorer, said at a conference, according to the Wall Street Journal. “I think it's not a matter of if, it's just a matter of when.”
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By James Burgess of Oilprice.com
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