In spite of oil prices bordering on catastrophically low levels, one area of the Texas oil landscape has barely shown signs of a slowdown in production. Oilfield traffic, although diminished, is still moving at a brisk pace.
The largest of the shale-oil regions that helped propel the U.S. energy boom, the Permian Basin, shows constant production increases at a time when the bulk of the drilling rigs in the country have been moth balled. All of this in the face of oil prices that have dropped to levels unseen since the 1980s.
The Permian Basin, an area the size of most Middle Eastern countries, has proven to be attractive to major companies like Exxon Mobil Corp. and Anadarko Petroleum. Exxon recently acquired 48,000 acres. Both companies, as well as others, are actively pursuing properties in the basin. The current rising production and acquisition activities in the region are just some of the major factors that help to buoy current U.S. domestic production levels.
“We’re already seeing a lot of people that are targeting the Permian,” Allen Gilmer, chief executive officer of Austin-based Drilling Info Inc., said in an interview in Houston. “If you were to look for the most stable area today to go do anything, it’s got to be there. Today you might even argue it’s more stable than Saudi Arabia.”
“The Permian’s multiple layers of oil- and gas-soaked rocks, in some places stacked 5,000 feet thick, contain plenty of places to drill that will yield 30 percent to 40 percent rates of return with crude prices as low as $40 a barrel”, Laird Dyer, a Royal Dutch Shell Plc energy analyst, said at a conference in Toronto Nov. 10, 2015. “A single layer in the Permian, the Spraberry, probably holds 75 billion barrels of recoverable oil”, Dyer said. Those recovery levels would be enough to supply the world for two years.
Texlark Exploration will continue to develop our Permian Basin properties throughout 2016 and into the future as we continue to acquire additional properties. At Texlark Exploration, we have seen the future…..and the future is now.