News

Permian Basin Overview

Posted by | May 25, 2017 | News, Oil Plays

permian-basin

permian-basin

The transcendental Permian basin of West Texas and southeastern New Mexico shows no signs of relinquishing its position as ground zero in the unconventional sector’s guarded transition from survival to growth mode. Recent statistics speak for themselves:

Eight operators combined have shelled out nearly $22 billion of late to snatch up assets in a play where per-acre price tags are approaching $60,000. Three midstream acquisitions, this year alone, add another $4.68 billion to the regional investment mix.

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North Dakota Oil Rig

North Dakota Oil Rig

There are hundreds of more jobs than takers in the heart of North Dakota’s oil patch. Finding a hotel room, parking space or table at a restaurant is no longer easy, according to the Associated Press.

More than two years after the state’s unprecedented oil bonanza fizzled to a lull, North Dakota — the nation’s No. 2 oil producer behind Texas — is experiencing a sort of boomlet that has pushed daily production back above 1 million barrels daily.

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us rig count

oil rig

That was another very good week for the rig business. According to the most recent rig count report from Baker Hughes, total US rig count is +16 for the last week.

Total of +8 oil rigs, +8 gas rigs and no change in miscellaneous rigs, bringing the total count of active oil and gas rigs to 901, from 885 previous week.

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oil and gas

oil and gas

The initial report on 1st-quarter Gross Domestic Product (GDP) was weak, but showed encouraging growth in the oil and gas production sector. Capital investment, which has been historically weak since the Great Recession, bounced back to a 9.4% uptick, led by expansion in oil and gas drilling and related equipment.

The Federal Reserve Board earlier reported preliminary 1st-quarter industrial production involving drilling in the oil patch was up 159% over 2016 levels. This accounts for nearly 0.5% of the reported 0.7% GDP growth in the 1st quarter. This expansion bodes well for sustainable growth in the future, as the strength in this sector has outsized impacts on the rest of the economy.

aspen midstream

aspen midstream

Aspen Midstream LLC announced today that the company has secured a commitment of $200 million from private equity group EnCap Flatrock Midstream. Aspen Midstream was launched this May and is headquartered in Dallas, Texas.

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Haynesville reservoir

A natural gas basin that helped kickstart the shale boom a decade ago is getting a new lease on life as the market recovers.

Production in the Haynesville reservoir will climb for the seventh straight month in June, reaching the highest since October 2014, government data show. Output in the play, located in Louisiana and east Texas, fell to a six-year low last March, pressured by tumbling gas prices and competition from gushier, more profitable wells in Pennsylvania and West Virginia.

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us rig count

oil rig

That was another good week for the rig business. According to the most recent rig count report from Baker Hughes, total US rig count is +8 for the last week.

Total of +9 oil rigs, -1 gas rigs and no change in miscellaneous rigs, bringing the total count of active oil and gas rigs to 885, from 877 previous week.

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permian-basin

As crude oil production in the Permian basin of western Texas and eastern New Mexico has increased, pipeline infrastructure has also increased to deliver this crude oil to demand centers on the U.S. Gulf Coast.

One indicator of a potential shortfall in available takeaway capacity in the Permian is a negative spread between the price of West Texas Intermediate (WTI) crude oil at Midland, Texas, and the price of WTI at Cushing, Oklahoma.

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us crude

us crude

U.S. crude production forecasts keep growing. The Energy Information Administration said domestic output will climb to a record 9.96 MMbpd in 2018, up from 9.9 MMbbl projected last month, according to the agency’s monthly Short-Term Energy Outlook released Tuesday. Production will average 9.31 MMbpd in 2017, up from 9.22 million projected in April.

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us rig count

oil rig

That was another good week for the rig business. According to the most recent rig count report from Baker Hughes, total US rig count is +7 for the last week.

Total of +6 oil rigs, +2 gas rigs and -1 in miscellaneous rigs, bringing the total count of active oil and gas rigs to 877, from 870 previous week.

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