Permian crude oil production
On June 8, 2015, the EIA (U.S. Energy Information Administration) released its latest “Drilling Productivity Report.” The EIA estimates that Permian Basin crude oil production amounted to ~2.05 MMbpd (million barrels per day) in May. This is 0.5% higher than April’s production total and a 29% increase over production in May 2014.
Permian shale oil production increased from 843,700 barrels per day in May 2007 to 2.05 MMbpd in May 2015. That’s an increase of 143% in eight years.
Oil production per rig
In May, the Permian Basin produced 260 bpd (barrels per day) per rig, a 27% gain in production per rig since May 2014. 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.
What this means for Permian producers
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 (RSPP), EOG Resources (EOG), Laredo Petroleum (LPI), and Matador Resources (MTDR).
RSPP makes up 1.35% of the SPDR S&P Oil & Gas Exploration & Production ETF (XOP).
Rigs in the Permian Basin
Recently, the number of active rigs in the US has fallen significantly. In May, the number of rigs working in the Permian Basin fell to 234, down from 263 in April. There were 565 rigs active in the Permian Basin in November last year. This was the highest rig count in the past seven years. For more on this topic, read Permian Basin Rig Count Increases Last Week: Is It a Turnaround?
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.