The lucrative Permian Basin still holds between 60 and 70 billion barrels of unharvested oil, IHS Markit Ltd said this week.
The recoverable resources in the basin shared by Texas and New Mexico could supply crude to every U.S. refinery for 12 years straight—that’s a total market value of $3.3 trillion at the going rate for West Texas Intermediate (WTI) barrels.
The data comes from a three-year study on 440,000 wells in the basin, which pumps more oil than any field in the continental United States.
“The Permian Basin is America’s super basin in terms of its oil and gas production history and for operators it presents a significant variety of stacked targets that are profitable at today’s oil prices,” IHS Markit researcher Prithiraj Chungkham said in a statement from the London-based organization.
The world’s top shale play, the Permian, has shown remarkable resilience amid the lower-for-longer oil prices. Permian production has grown and should continue its rise into the foreseeable future.
Technological advances spurred the rapid rise of the Permian, but as drillers are set to continuously develop the hottest U.S. shale play, they may soon start to test the region’s geological limits.
“The technology vs. geology tug-of-war has the ability to profoundly alter the future production profile of the region, and ultimately oil price. Less Permian supply from 2021 onwards would exacerbate the global supply gap and effectively mean the U.S. cannot deliver what the market believes it can. Other sources of higher cost, conventional production would be needed,” WoodMac’s Robert Clarke noted.
According to EIA’s September Drilling Productivity Report, the Permian will pump 2.580 million bpd of oil this month. Crude oil output is set to rise by another 55,000-bpd next month, to 2.635 million bpd. The Permian, as usual, contributes the most to the expected production growth out of the top U.S. shale plays.