The Permian Basin: Key Insights
The Permian Basin, which spans parts of West Texas and New Mexico, is considered one of the most prolific regions for oil and gas production in the US. The Permian Basin encompasses several basins including the Midland basin and the Delaware basin.
According to the EIA’s (US Energy Information Administration) DPR (Drilling Productivity Report) released on January 17, 2017, crude oil production from the seven major producing regions in the US—including Permian, Bakken, Eagle Ford, and Marcellus—will rise by 41,000 barrels per day to nearly 4.8 million barrels per day in February 2017.
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The majority of this increase is estimated to come from the Permian Basin, which is expected to add 53,000 barrels per day. This is expected to be offset, however, by declines in the Bakken of 20,000 barrels per day. Key Permian players include Apache (APA), Concho Resources (CXO), and Chevron (CVX).
Permian Basin drilling activity
According to a separate report released by the EIA on November 15, 2016, the Permian had almost as many active oil rigs last year—including both onshore and offshore rigs—as the rest of the US combined.
The above chart from the EIA’s November Drilling Productivity report compares oil production in the Permian, as compared to other regions like Eagle Ford and the Bakken, between 2007 and 2016.
In the January 2017 DPR, the EIA noted that DUC (drilled but uncompleted) wells for the seven regions grew by 167 in December 2016, to 5,379. The Permian alone surpassed other regions by adding 137 DUC wells. For context, the region that added the second-highest number of DUCs in December was Niobrara, adding only 30 DUC wells. DUC wells are an important indicator for determining future oil and gas production from a region.