Wednesday, November 16, 2016

The Permian Now Holds The Record -- New USGS Report -- 3x Bigger Than The Bakken; Jaw-Dropping -- November 16, 2016

Three times the size of the record-setting Bakken.


Before you begin this "jaw-dropping" update on the Permian, let's go back to this observation made by an expert on oil and gas and also an expert on global warming:

From the linked articles below:
“It’s no surprise that Texas has massive oil fields, but these new findings from USGS are jaw-dropping. Fracking and horizontal drilling have turned the United States into a global energy superpower, and the untapped potential in the Wolfcamp means we won’t be surrendering that status any time soon,” group spokesman Steve Everly said. “For the few remaining advocates of ‘Peak Oil,’ this certainly isn’t their lucky day.”
Previous discovery record: 2013 -- North Dakota's Bakken-Three Forks.

From Bloomberg: a $900 billion oil treasure lies beneath West Texas desert.

From Breitbart: West Texas deposit 'largest" in history.

From MarketWatch: the US is increasingly looking at this Texas region for oil.

Data points that should get your attention:
  • new USGS report
  • 3x larger than North Dakota's Bakken
  • single largest US unconventional crude accumulation ever assessed
  • at current prices: almost $1 trillion
  • the formation is as much as a mile thick -- read that again: this single formation is as much as a mile thick -- the Bakken is measure in tens of feet
  • the best news -- this report concerns a deposit in a state, that:
  • is oil friendly
  • sits next to Mexico
  • has low tax rate
  • is able to get pipelines laid
  • has huge export capability along a coast relatively near a newly enlarged Panama Canal
  • location of the surveyed area: from north of Lubbock to remote regions southwest of San Angelo
  • an estimated and previously unaccounted for 20 billion bbls crude oil; 16 trillion cubic feet of natural gas; and 1.6 billion bbls of natural gas
  • despite all the press on the Permian and despite producing since the 1920s, in fact, "its multiple layers of oil-soaked shale remained largely untapped until the last several years"
  • COP, November 10, 2016: increased its own estimate for the size of its Wolfcamp holdings to almost 2 billion bbls from 1 billion bbls last year -- almost doubled its estimate
  • COP: two recent wells -- pumping an average of 2,000 bopd
  • everything above concerned crude oil
  • in addition, the Wolfcamp holds 16 trillion cubic feet of natural gas
  • in addition, the Wolfcamp holds 1.6 billion bbls of gas liquids   
  • west Texas' Permian basin holds nearly as many active oil and gas drilling rigs as the rest of the US combined -- and includes offshore rigs in the Gulf of Mexico
  • the Permian is currently the only region where crude oil production is expected to increased for the third straight month


  1. Well, North Dakota Started at 12% taxes on oil I think they got it down to about 10%. Texas is about 8% and much closer to distribution. Hmmm. What would it take to get a big piece of pie it looks like a a bit more crumb needs to be left in the pan. Hope North Dakota realizes their main competitor is Texas and Taxes.

    1. You are correct; I'll probably post some more along this line.

  2. FYI, the map you show highlights the Midland side of the Permian Basin, but on the other side of the central basin platform is the Delaware portion of the Permian that stretches across far west Texas and into New Mexico. It's a truly massive play.

    1. You are so correct. Thank you for noting that.

      One of the interesting things to think about: although the USGS has this particular "formation" 3x bigger than the Bakken (older data, of course), the Wolfcamp is said to be up to a mile thick; I don't think the middle Bakken ever exceeds 60 feet, and probably even less for the Three Forks. Much to say, about all of this.

  3. Mr. Oksol

    As a follow up to Fracn's comment above, not only is the Delaware Basin to the west a huge asset, this whole 're-evalutive' approach from USGS (and, ultimately, the EIA) will extend to formations such as the Powder River, the Uinta, and several others in the wings.

    The astounding advances in unconventional hydrocarbon extraction has greatly increased the now-recognized amount of these recoverable resources.

    1. What makes this all so exciting is this: for the past eight years we have had an administration that did not want to give any credit to the entrepreneurs, the risk-takers, the geologists, the roughnecks, the frackers, the private-public partnerships that made this all possible.

      Now, not only is the US in a position to be recognized as the #1 energy producer in the world on its own merits, but we will (very likely) have an administration willing to "brag" about it; market it; assist it. The new administration is likely to get back to real markets and real science.

      It's incredibly exciting.