New Year prediction: The permian gets more productive as oil stabilizes
Despite a prolonged slump in oil costs, there was one bright spot in the oil patch last year — the permian Basin. The vast field that encompasses a large swath of West texas and components of southeastern new mexico has remained surprisingly resilient as oil hovered around $50 a barrel.
Once it had been unthinkable that domestic crude production can be profitable at prices that low. however 2016 saw will increase in efficiency and technology that drew additional companies looking for opportunities to drill domestically. No oil field benefited more than the permian.
There are currently more active rigs in the permian than within the rest of the us combined, onshore or offshore, according to the Energy info Agency.
The us geological Survey estimates that the Permian’s Wolfcamp shale contains more than 20 billion barrels of oil and 16 trillion cubic feet of natural gas, creating it the largest field ever discovered within the us.
In 2017, look for the permian to become even additional productive as oil prices stabilize. A deal reached by opec to limit provide ought to ease a number of the wild swings we saw in 2016. And as getting a piece of the action in the permian grows more expensive, expect the number of mergers and acquisitions to rise along with increased capital investment.
Does that mean an employment rebound for areas whose economy depends on oil and gas? That’s uncertain. The industry recovery that’s within the cards by midyear may not mean an increase in oil sector jobs. because of increased efficiency, one rig today will do what it took dozens to produce a decade ago.