Permian Shale Oil Production Rises in April



Permian shale oil production

On May 11, 2015, the U.S. Energy Information Administration (or EIA) released its latest Drilling Productivity Report (or DPR). The EIA estimates that Permian Basin shale oil production was ~2.03 million barrels per day (or MMbbls/d) of crude oil in April. This was 1.1% higher than March’s production and a 30% increase over April 2014.

Higher crude oil production should benefit energy producers operating out of the Permian Basin. Active oil and gas producers in the Permian Basin include Concho Resources (CXO), RSP Permian, Inc. (RSPP), EOG Resources Inc. (EOG), Laredo Petroleum (LPI), and Matador Resources (MTDR). RSPP is 1.1% of the SPDR S&P Oil & Gas Exploration & Production ETF (XOP).

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Permian oil production increases 139% in eight years

Permian shale oil production increased from 853,000 barrels per day in April 2007 to 2.03 million barrels per day in April 2015. That’s an increase of 139% in eight years.

The horizontal drilling and hydraulic fracturing process has unlocked huge oil reserves in the Permian Basin. The most productive Permian formations are the Spraberry, Wolfcamp, and Bone Spring formations.

Oil production per rig

In April, the Permian Basin produced 245 barrels per day (or bbl/d) per rig, a 23% gain in production per rig since April 2014.

Rigs in the Permian Basin

Recently, rigs in the United States have fallen significantly. In April, the number of rigs in the Permian Basin fell to 263, from 306 in March. The Permian Basin rig count was 565 in November last year. This was the highest rig count in the past seven years. You can read more about the Permian Basin rig count in Market Realist’s article Permian Basin Rig Count Registers 1st Gain in 21 Weeks.

The Bakken is one of the most prolific crude oil shales in the United States. Read the following part of this series to find out why.


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