Monday, October 14, 2013

The Spraberry Trend In The Permian

Updates

June 21, 2016: update on the Permian, Forbes

August 18, 2014: Motley Fool recycles/repackages story on Spraberry/Permian

July 13, 2014: Rigzone update on the Permian; an important article. 

Jim Cramer's The Street: Spraberry (Permian) is bigger than both the Bakken and the Eagle Ford. When someone says any field is bigger than the Bakken, I tell them: "show me the numbers." The USGS says the Bakken is the largest continuous reservoir in the lower 48 and the USGS numbers are significantly lower than CLR's estimates.

Other sources

The Spraberry -- wiki

Cool story on the Permian, May 11, 2016.
Original Post
 
I have tried to avoid talking about this oil company and this oil field, but a reader alerted me to an article today, and I said I would post it/link it.

SeekingAlpha reports on Pioneer Natural Resources and the Spraberry Trend in the Permian. There are several oil plays in the Permian, and it is confusing for me to keep track of them all.

As I noted in an earlier post, this is the "analogy":
  • the Williston Basin::the Bakken/Three Forks
  • the West Texas Permian Basin::Wolfcamp, Spraberry, Cline, Delaware, others
  • the West Gulf::Eagle Ford
The importance of the linked SeekingAlpha article is the information about the Spraberry, not the oil company featured. (Remember, my site is not an investment site. I started the site to help me understand the Bakken, and to understand the Bakken better, it helps to compare it to other fields.)

Note the graph.

The estimates of recoverable oil are very, very conservative based on the Bakken estimate. Harold Hamm, CLR, suggests there is 903 billion bbls of original crude oil in place in the Bakken. In some places, only 1% may be technically recoverable; in other places EOG says it is recovering 8% and possibly more. If five percent (5%) of Bakken OOIP is recovered that could amount to 45 billion bbls of crude oil in the minds of some. That is still less than the 50 billion bbls of potentially recovered oil in the Spraberry Field as noted in the graph at the linked article.

The importance of this article suggests to me that the US is not going to run out of oil in my investing lifetime. In fact, with natural gas, conservation, electric vehicles, wind, and solar, the US could be sitting in an energy sweet spot for decades to come.

2 comments:

  1. You may want to correct your "millions" to "billions" when referring to the amount of oil in Bakken and Spraberry. If ND almost is at 1 million barrels of oil produced per day, then we will deplete the Bakken system in less than a year! Thanks for keeping up the great blog

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    Replies
    1. Wow, I make that error a lot. Thank you for catching it. I will correct it.

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