Six Formations Boost Permian Production

EIA Analyst Phil Budzik told Rigzone that he expects Permian oil production to continue outpacing U.S. Gulf production, citing the ease of deploying resources in the onshore Permian basin versus offshore and the lag time of seven years to a decade from discovery of a new offshore reservoir to the start-up of production.

“The lag is probably the most important – the fact that you can drill quickly and get production and a return on your money more quickly,” said Budzik, adding that producers such as Apache Corp. are moving back into the region due to the faster return.

“Rigs can be quickly mobilized in the Permian,” Budzik explained. This mobilization of rigs, particularly horizontal drilling rigs, has resulted in the Permian leading the nation in terms of the number of horizontal rigs.

Describing the Permian as a “sandbox full of oil”, Budzik said the basin, which is approximately 250 miles wide and 300 miles long, offers greater opportunities for oil production over time as compared with the Eagle Ford and Bakken plays due to its multi-layer formations. Given enough time, technological development, and understanding of geology, some of the other formations such as the Glorieta and Yeso in the Permian could be just as productive as formations such as the Spraberry, Wolfcamp and Bone Spring formations.

Permian production growth faces a challenge in the availability of infrastructure to keep up with production increases – a challenge also seen in other U.S. tight oil plays. Producers have increasingly had to rely on more railroad transportation to ship crude to market, Budzik noted. This trend has been seen in the Bakken tight oil play in North Dakota.

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