The Permian Basin, Born Again

In the Permian Basin, drilling and production is rising while the price of oil is falling.  That is good for some, not so good for others.  All told, it looks to me that by combining "horizontal" drilling with careful and selective hydraulic fracturing, the future looks bright for increasing activity and production, which is good for everyone.
Peter


source: http://www.eia.gov/todayinenergy/detail.cfm?id=7030

July 10, 2012

Rising production in the Permian basin

Sources: U.S Energy Information Administration, based on Baker Hughes and HPDI, LLC.
Notes: Graph includes rig counts through June 2012 and oil production through December 2011. Active rigs include rigs drilling for both crude oil and natural gas.

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The source for the crude oil production data series published on July 10 was websites of the Railroad Commission of Texas and the New Mexico Energy, Minerals and Natural Resources Department. On July 11 the source was changed to HPDI, LLC, because HPDI, LLC collects both that data and production data that has not yet been processed by the Railroad Commission of Texas.

The Permian Basin—a long-time oil and natural gas producing region in west Texas and eastern New Mexico—is showing signs of new life. The active rig count has grown from 100 rigs in mid-2009 to over 500 rigs in May 2012. According to data from HPDI, oil production from the Permian has increased fairly steadily over the past few years, reaching the 1 million barrels per day (bbl/d) threshold in 2011—the first time since 1998.

Sources: U.S. Energy Information Administration, based on Bloomberg.

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Growing oil production in the Permian Basin and other Texas plays, most notably the Eagle Ford shale, may be starting to strain existing takeaway capacity and is creating a need for Texas oil to serve more distant refineries. While new pipeline projects are scheduled to come online, current transportation constraints have caused Permian crude oil, which is priced in Midland, Texas, to sell at a significant discount to WTI beginning in January 2012.

tags: crude oil , drilling , Eagle Ford , liquid fuels , oil/petroleum , prices , production , Texas , WTI (West Texas Intermediate)

Money Flowing Into American Oil and Gas From Overseas

We hear very little about the large investments foreign companies are making in oil and gas exploration and production activities in the United States.  I don't know why this is not talked about much in the news, but during these difficult economic times, we Americans should be grateful.
Peter

Big overseas investors supply momentum for North American shale growth

 

July 5, 2012

Don Warlick, Warlick International
Entities outside the US and Canada are funding a surprisingly large share of development in unconventional oil and gas plays -- and that trend should continue.
Typically these are IOCs (international oil companies), state-backed investment groups or other foreign-based entities investing not only for financial gain but also to acquire technical knowledge about unconventional oil and natural gas development that can be applied in undeveloped shales in their own countries. In return US and Canadian energy companies receive funding to develop important shale plays and establish new reserves.

These investments are significant -- in a recent analysis by PricewaterhouseCoopers, 191 M&A deals worth $187 billion were announced in 2011. That was an increase over 2010 which had 196 deals worth $139 billion. The average deal in 2011 was $979 million (up more than 38%, on average over 2010).
Who is making these investments? Companies based in France, China, Japan, Spain, South Korea, Norway and Australia are among recent investors making financial commitments. Some examples:

Continued here: http://www.ogfj.com/articles/2012/07/big-overseas-investors-supply-momentum-for-north-american-shale-growth.html