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An underexplored well in Loving County is the next hot shale spot in the Permian Basin, according to a new report by The Motley Fool.
Successful drills in neighboring Lea County suggest sizeable and “expectation-beating” reserves in the area, EGO Resources, one of the several companies with plays there, commented recently. Energen claims 324 drilling locations in Loving, which boasts a population that is so small, we could list every resident of the county here and still come in under 600 words. Loving County holds only 82 residents in the 2010 census, making it the least populated county in the United States.
Earlier this year, WPX Energy shelled out $775 million to secure the rights to drill in Loving and nearby counties. The increased activity signals that Matador Resources, with “decent” access to land in the region, could be sitting on a significant future play.
Companies have been drilling the Permian for oil for over a century, and 29 billion barrels later, the basin keeps on giving. It remains one of the most popular places for oil companies to invest, even during market downturns.
Last year, the oil industry invested more than $28 billion in buying up land in the Permian Basin, three times the amount spent in 2015, according to Reuters. That accounted for about 39 percent of all money spent on land acquisitions in the U.S. oil industry in 2016. Other shale basins do not even come close to that level of investment. By way of comparison, the Marcellus Shale attracted 10 percent of total land investment in 2016, while the once-hot Bakken only captured 3 percent.
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Since the U.S. rig count bottomed out in May 2016, the industry has added 250 oil rigs back into action through the end of January – the Permian accounted for 154 of those, or more than 60 percent. No other shale basin comes even remotely close to those gains.
"We could easily see an extra 100 rigs out here in the Permian by June," Josh Clawson of Gesco, an electrical contractor for oil drilling rigs, told Reuters in February.
By Zainab Calcuttawala for Oilprice.com
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Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on…