How Permian Became World's Hottest Oil Play

摘要

The Permian Basin has emerged not only as the hottest upstream play in the US, but as one of the most attractive in the world. The oil-rich shale play, which straddles West Texas and eastern New Mexico, has been almost single-handedly responsible for the spike in the US oil rig count since late April, accounting for 68 of the 82 additions. The Permian's 200 rigs now account for around one in eight of active rigs worldwide, an acknowledgement of its status as a world-class, low-cost play, and one more resilient to low prices than any other US shale basin (PIW Aug.8'16). The Permian's oil-rich geology and its extensive infrastructure of terminals and pipelines mean lower break-even costs, which investment bank Wells Fargo now estimates at under $30 per barrel in the Permian's Delaware and Midland sub-basins. In US shale, its economics are virtually unrivalled. Although the sweetest of the 'sweet spots' in the Bakken and Eagle Ford can compete, output in these basins has been falling. Since oil prices began falling in mid-2014, Bakken output has dropped by 20% to 972,000 barrels per day, while Eagle Ford production is down by 26% at 1.08 million b/d, according to Energy Information Administration figures. But Permian production has jumped by 24% to 1.97 million b/d. Several Bakken and Eagle Ford operators have said they need oil prices of $55-$60/bbl to ramp up drilling and completion activity (PIW Aug.29'16).