Permian Estimates -- Jaw-Dropping -- Oilprice -- December 9, 2018

This is what I was waiting for all weekend: articles on what the USGS survey of the Permian mean; what the implications are. From oilprice:

This week the United States Geological Survey (USGS) announced a groundbreaking oil and gas discovery in West Texas’ Permian Basin.

According to the organization’s recent press release, a whopping 46.3 billion barrels of oil, 281 trillion cubic feet of natural gas, and 20 billion barrels of natural gas liquids are now believed to lie untapped in the Wolfcamp Shale and overlying Bone Spring Formation area of Texas and New Mexico’s Permian Basin.

Major players in the energy industry already have a significant presence in Wolfcamp and Bone Spring, including Occidental Petroleum Corp. and Pioneer Natural Resources Co.

It was already well known and well documented that these fields were remarkably fertile grounds for oil extraction, but the jaw-dropping extent of the new figures released this week by the USGS has made the massive crude and shale reserves of the Permian Basin freshly headline-worthy. The figures in this week’s press release are in fact, in the case of Wolfcamp Shale, more than double the previous resource assessment.

USGS press release here.

Again, from the linked article, the author noted:

Additionally, these discoveries come at a particularly opportune time for West Texas, as a major injection of funding has just been provided toward infrastructure the West Texas area via a federal grant supported by U.S. Senator John Cornyn. The grant, which comes from a program led by the U.S. Department of Transportation's Better Utilizing Investments to Leverage Development (B.U.I.L.D.) will direct money to infrastructure projects in Winkler, Glasscock and Reagan Counties.

One can be pretty sure that Beto, who will probably run again Cornyn would never have submitted such a request. Beto's platform, I assume, aligns with Hillary's. Stop fracking.

US Department Of The Interior Press Release -- December 6, 2018

Another e-mail from December 6, 2018, that I missed, from the USGS:

Date: December 6, 2018Contact: Interior_Press@ios.doi.gov 

USGS Identifies Largest Continuous Oil and Gas Resource Potential Ever Assessed

Estimates Include 46.3 Billion Barrels of Oil, 281 Trillion Cubic feet of Natural Gas, and 20 Billion Barrels of Natural Gas Liquids in Texas and New Mexico’s Wolfcamp Shale and Bone Spring Formation

WASHINGTON - Today, the U.S. Department of the Interior announced the Wolfcamp Shale and overlying Bone Spring Formation in the Delaware Basin portion of Texas and New Mexico’s Permian Basin province contain an estimated mean of 46.3 billion barrels of oil, 281 trillion cubic feet of natural gas, and 20 billion barrels of natural gas liquids, according to an assessment by the U.S. Geological Survey (USGS). This estimate is for continuous (unconventional) oil, and consists of undiscovered, technically recoverable resources.
"Christmas came a few weeks early this year," said U.S. Secretary of the Interior Ryan Zinke. "American strength flows from American energy, and as it turns out, we have a lot of American energy. Before this assessment came down, I was bullish on oil and gas production in the United States. Now, I know for a fact that American energy dominance is within our grasp as a nation."
“In the 1980s, during my time in the petroleum industry, the Permian and similar mature basins were not considered viable for producing large new recoverable resources. Today, thanks to advances in technology, the Permian Basin continues to impress in terms of resource potential. The results of this most recent assessment and that of the Wolfcamp Formation in the Midland Basin in 2016 are our largest continuous oil and gas assessments ever released,” said Dr. Jim Reilly, USGS Director. “Knowing where these resources are located and how much exists is crucial to ensuring both our energy independence and energy dominance.”    
Although the USGS has previously assessed conventional oil and gas resources in the Permian Basin province, this is the first assessment of continuous resources in the Wolfcamp shale and Bone Spring Formation in the Delaware Basin portion of the Permian. Oil and gas companies are currently producing oil here using both traditional vertical well technology and horizontal drilling and hydraulic fracturing.
The Wolfcamp shale in the Midland Basin portion of the Permian Basin province was assessed separately in 2016, and at that time it was the largest assessment of continuous oil conducted by the USGS. The Delaware Basin assessment of the Wolfcamp Shale and Bone Spring Formation is more than two times larger than that of the Midland Basin. The Permian Basin province includes a series of basins and other geologic formations in West Texas and southern New Mexico. It is one of the most productive areas for oil and gas in the entire United States.
“The results we’ve released today demonstrate the impact that improved technologies such as hydraulic fracturing and directional drilling have had on increasing the estimates of undiscovered, technically recoverable continuous (i.e., unconventional) resources,” said Walter Guidroz, Program Coordinator of the USGS Energy Resources Program.
Undiscovered resources are those that are estimated to exist based on geologic knowledge and already established production, while technically recoverable resources are those that can be produced using currently available technology and industry practices. Whether or not it is profitable to produce these resources has not been evaluated.
USGS is the only provider of publicly available estimates of undiscovered technically recoverable oil and gas resources of onshore lands and offshore state waters. The USGS Delaware Basin Wolfcamp shale and Bone Spring Formation assessment was undertaken as part of a nationwide project assessing domestic petroleum basins using standardized methodology and protocols.
The new assessment of the Delaware Basin Wolfcamp shale may be found online. To find out more about USGS energy assessments and other energy research, please visit the USGS Energy Resources Program website.

Another Basin To Challenge the Bakken, the Wolfcamp in West Texas

General

EIA update, February 26, 2018.

USGS report; 3x larger than the Bakken, November 16, 2016.

Cool story on the Permian, May 11, 2016.

Updates

November 16, 2018:

December 14, 2016: new operator to pay about $40,000 / acre in the Permian (Wolfcamp, Bone Spring). 

December 14, 2016: one of the few plays in which the proved reserves increased in 2015 -- Wolfcamp and Bone Spring.  

June 21, 2016: update on the Permian, Forbes. 
 
April 28, 2016: for Pioneer Natural Resources, cash costs down to $14/bbl. 

February 21, 2014: Permian Wolfcamp valued at $61,600/acre. 

August 26, 2013: Nice map. Mike Filloon on the Permian.

June 4, 2013: see February 5, 2013, story. Chinese have closed on the previously announced deal. 

February 5, 2013: Chinese company to buy assets in Wolfcamp.

January 30, 2013: the Cline Shale and the Wolfcamp overlap each other in the Midland, Texas, area.

May 22, 2012: Nice article on Cline Shale, the source rock for the Wolfcamp Formation (2nd page of a 3-page article.

Original Post

Link here.

I won't be following this on a regular reader, but readers may be interested in the "next big thing (?)."

The Wolfcamp.

Spanning numerous counties across West Texas, the Wolfcamp formation is located below the long-plied Spraberry field, which helped make Midland, Texas, oil-central starting in the early 1950s.

Its location in the Midland Basin is within the larger Permian Basin.

Sheffield and other oil experts say the Wolfcamp is probably the thickest of any onshore U.S. oil shale play, with up to 1,000 feet of potential payout across hundreds of thousands of acres.

The Wolfcamp has been mentioned twice before on this blog, first by Papa/EOG and second by CHK. 

The thickness of the Bakken varies throughout the Williston Basin, but its generally between ten and 200 feet thick. A thousand-foot payzone onshore is .... well, for me, unheard of.

Drill, drill, drill.