Locator: 49153PERMIAN.
RBN Energy: the sour-gas-related infrastructure of the booming northern Delaware Basin. Archived.
The numbers out of Eddy and Lea counties in southeastern New Mexico are nothing short of staggering. Crude oil production at 2.3 MMb/d, or one-sixth of total U.S. output. Natural gas production north of 9 Bcf/d and rising fast. More than 90 active rigs — again, one-sixth of the U.S. total.
Many top E&Ps are stoked about the Northern Delaware Basin because of its stacked benches of high-quality, crude-saturated shale and carbonate formations. But much of the associated gas emerging from wells in Lea County is “off-spec” — tainted by levels of hydrogen sulfide (H2S) and carbon dioxide (CO2) that need to be dealt with — and producers and midstreamers have been scrambling to develop the sour-gas-related infrastructure required to support production growth.
In today’s RBN blog, we begin a detailed look at the Northern Delaware’s existing and planned infrastructure for handling sour gas, including special gas gathering systems, amine treatment facilities, acid gas injection (AGI) wells, sweet gas pipelines and processing plants.
t wouldn’t be an exaggeration to say that New Mexico’s Eddy and Lea counties are now the epicenter of U.S. hydrocarbon production. As the Energy Information Administration (EIA) recently pointed out, the side-by-side counties (total population ~140,000) accounted for an astounding 52% of total U.S. crude oil production growth from 2020 to 2024 — a nearly 1 MMb/d increase in only four years (mustard-brown layer and bar segments in Figure 1 below). Lea County alone produced an average of 1.2 MMb/d of crude and 4.3 Bcf/d of gas in June, according to ShaleXP, and Eddy’s output (a little gassier) averaged about 900 Mb/d and 5 Bcf/d. Eight counties on the Texas side of the Permian — six in the Midland Basin and two in the Delaware — accounted for another 40% (or ~760 MMb/d) of the 2020-24 gain in total U.S. crude production (burgundy and red layers and bar segments).
Figure 1. Eddy and Lea Counties’ Shares of U.S. Crude Oil Production and Production Growth.
Source: EIANot for nothing did Eddy and Lea take center stage. Instead, over the past several years a handful of Permian producers — EOG Resources, Devon Energy, Mewbourne Oil, Occidental Petroleum and Matador Resources among them — (1) came to understand just how much crude oil was trapped within the thousands of vertical feet of shale and carbonate formations in the Northern Delaware and (2) perfected the drilling-and-completion techniques to free that crude (and lots of NGLs-rich associated gas) in an increasingly systematic, efficient and economic manner. Nowadays, it’s common for newly completed horizontal wells in the two counties to produce between 60 Mbbl and 120 Mbbl of crude oil in their first 30 days of operation, and for multi-well pads to produce several hundred thousand barrels a month.
ChatGPT prompt: Oil. Permian. Delaware Basin. Is FANG / VNOM located across the Delaware Basin or more prominently in either the norther Delaware Basin or the southern Delaware Basin?
ChatGPT reply:
- FANG (Diamondback) is more prominently in the Southern Delaware Basin when it comes to its core development acreage. Their big, operated acquisitions and development are focused in counties like Reeves & Ward and other southern Texas Delaware areas.
- VNOM (Viper) has a royalty / minerals footprint that is more spread out, covering both southern and more northern acreage. But don’t think of them as having “core operated development” (drilling, completions) as much in the northern Delaware as some operators do; their strength is royalty exposure over a broad area.
