Permian oil riches rise as U.S. sees reserves worth $900 billion

Permian oil riches rise as U.S. sees reserves worth $900 billion

In a troubled oil world, the permian basin is that the gift that keeps on giving.

One portion, called the Wolfcamp formation, was found to hold twenty Bbbl of oil trapped in four layers of sedimentary rock beneath the desert in West texas, the U.S. geological Survey said during a report on Tues. That’s virtually 3 times larger than North Dakota’s Bakken play and also the single largest U.S. unconventional crude accumulation ever assessed. At current costs, that oil is worth almost $900 billion.

The estimate lends credence to Pioneer Natural Resources Co. ceo Scott Sheffield’s assertion that the Permian’s shale endowment may hold the maximum amount as 75 Bbbl, creating it second only to Saudi Arabia’s Ghawar field. Pioneer has been increasing its production targets all year as drilling within the Wolfcamp produced larger gushers than the Irving, Texas-based company’s engineers and geologists forecast.

“The fact that this is often the largest assessment of continuous oil we've got ever done simply goes to show that, even in areas that have produced billions of barrels of oil, there's still the potential to find billions a lot of,” walter Guidroz, coordinator for the geological survey’s energy resources program, said within the statement.

Oil explorers are flocking to the permian basin in West texas and new mexico to tap deposits thus rich that they generate profits despite the 2 1/2-year slump in crude costs. A race to grab land within the permian has been the most driver of a surge of deals within the energy patch and also the industry’s main source of excellent news.

Although the permian has been gushing crude since the 1920s, its multiple layers of oil-soaked shale remained mostly untapped till the last many years, once intensive drilling and fracturing techniques perfected in different U.S. shale regions were adopted. The Wolfcamp, that is as much as a mile (1.6 km) thick in some places, has been one of the first targets of shale drillers.

ConocoPhillips, the world’s largest independent oil producer by market value, increased its estimate for the size of its Wolfcamp holdings on nov. 10 to 1.8 Bbbl from 1 Bbbl last year. every day earlier, Concho Resources inc. ceo Timothy Leach told investors and analysts on a conference call that 2 recent wells it drilled within the Wolfcamp were pumping an average of 2,000 bopd every.

Diamondback Energy inc. disclosed last week that it's been drilling 10,000-foot horizontal wells within the Wolfcamp. Production from the wells has been as high as 85th crude, according to the Midland, Texas-based explorer.

For Apache firm., a slice of the Wolfcamp and another Permian layer called the Bone Spring are major parts of the 3 Bbbl Alpine High discovery that the company announced in september. ceo John Christmann referred to as Alpine High “a world category resource” throughout a Sept. 7 presentation at a Barclays Plc conference in new york.

The Wolfcamp shale also holds 16 Tcf of natural gas and 1.6 Bbbl of gas liquids, the geological survey said in a statement on tuesday.