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U.S. shale-oil output is still increasing in the Permian Basin


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U.S. shale-oil output is still increasing in the Permian Basin
By Myra P. Saefong
Published: Mar 8, 2016 2:07 p.m. ET

Permian Basin is the ‘most prolific oil-producing area’ in the U.S.

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The sun may be setting for U.S. shale-oil regions, but maybe not for the Permian Basin.
When it comes to shale-oil regions in the United States, not all of them are created equal.

Oil production in the Permian Basin, which spans from western Texas to southeastern New Mexico, has been much more resilient in the face of the near-65% drop in oil prices CLJ6, -3.17% since mid-2014 than other shale regions, according to Charles Perry, chief executive officer of energy-consulting firm Perry Management.

U.S. Energy Information Administration

Key U.S. shale regions
“Not all shale production is the same and production in most shale areas has fallen since 2014,” he said. But the Permian Basin has grown to be the “most prolific oil-producing area” in the U.S.

The region now represents 18% of total U.S. oil production, according to Perry.

Data from the U.S. Energy Information Administration show overall declines in oil output this year from the Eagle Ford shale play in South Texas and the Bakken shale play, which stretches from Canada into North Dakota and Montana.

U.S. Energy Information Administration

The Eagle Ford shale region is expected to see the largest daily production decline out of the seven major domestic shale plays next month, data from the EIA show Monday. Output there is seen falling by 58,000 barrels a day to 1.177 million barrels a day in April.

Output from the Bakken shale region is forecast to fall by 28,000 barrels to 1.079 million barrels a day.

“The number of drilling rigs which are drilling new wells has declined dramatically,” said Perry. Also, “depletion in production in new wells in some areas has been substantial.”

Standing out
But while the number of rigs operating in the Permian Basin has declined considerably, that region’s oil production has been climbing steadily since 2010, said Perry.

As of the first week of February, it was at about 2.004 million barrels a day—up from 1.4 million barrels a day at the beginning of 2014—even though the drilling-rig count for the Permian has fallen to 181 in the first week of February, from about 550 in 2014.

EIA data released Monday showed expectations for a modest fall of 4,000 barrels a day in the Permian region’s oil production to 2.036 million barrels a day.

That follows steady increases over the past few months. James Williams, an energy economist at WTRG Economics, said the forecast output fall for April would follow a 7,000 barrel-per-day increase for March.

U.S. Energy Information Administration

According to the EIA, the Permian Basin is the largest crude-oil producing region in the U.S., and output from that area has exceed production from the offshore Gulf of Mexico region since March of 2013.

“Almost any location in [that region] can be a shale-oil project,” Perry said.

‘If you are in an oil-producing related business, the Permian Basin is the place to be in 2016.’
Charles Perry, Perry Management

It has six major shale-oil producing formations: Spraberry, Wolfcamp, Bone Spring, Glorieta, Yeso and Delaware.

Some companies have “‘pulled their horns’ in all other shale-rich fields and are now concentrating all of their drilling in the Permian Basin,” said Perry, noting that Pioneer Natural Resources Co. PXD, -2.81% has said it was going to shut down drilling in the Eagle Ford and concentrate on the Permian Basin.

Pioneer is “probably the most active producer in the Permian Basin,” said Perry. Other major Permian Basin drillers include Chevron Corp. CVX, -1.60% Concho Resources Inc. CXO, -4.10% Occidental Petroleum Corp. OXY, -4.02% and ConocoPhillips COP, -5.02%

“If you are in an oil-producing related business, the Permian Basin is the place to be in 2016,” said Perry.



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New survey finds twenty billion barrels of oil worth up to $900 billion under west Texas in largest continuous field ever discovered in the U.S.
  • The Wolfcamp Shale in the Permian Basin, west Texas, has an estimated 20 billion barrels of oil worth up to $900 billion
  • It also has an estimated 1.6 billion barrels of natural gas liquids, according to the new US Geological survey
  • Oil field is biggest ever discovered and is nearly three times larger than the shale oil found in 2013 in the Bakken and Three Forks formations
  • Experts say only 50-60 per cent of the oil will be recovered while oil firms will have to pay for extraction and processing

Read more: http://www.dailymail.co.uk/news/article-3955542/New-survey-finds-twenty-billion-barrels-oil-worth-900-billion-underneath-Texas-largest-continuous-field-discovered-U-S.html#ixzz4QdPpkFcB
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I just paid $1.96 gal. for regular today.


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I paid a $1.89 in Colorado today. Drilling rigs are starting to pop up again in my area. The biggest problem around us is getting the oil to refineries. They are trying to get as many pipelines in as possible right now.