December 13, 2018
Largest Continuous Oil & Gas Resource Ever Found in Permian Basin
Big news came out of the Permian Basin last week when the U.S. Department of Interiors announced the discovery of the largest continuous oil and gas resource ever found. The official assessment released by the U.S. Geological Survey (USGS) estimates the reserve, located in the Wolfcamp Shale and overlying the Bone Spring Formation in the Delaware Basin portion of Texas and New Mexico’s Permian Basin, could produce upwards of 46.3 billion barrels of oil, 281 trillion cubic feet of natural gas, and 20 billion barrels of natural gas liquids. Leaders in the oil and gas industry believe this discovery will help to further America’s push for energy independence. In addition, many of these same leaders attribute the continued growth of the American energy sector to the development of new, industry-leading technology. Recent innovations in fracking and drilling technologies have made these previously identified yet unreachable natural resources accessible for extraction by oil and gas companies. While news of this magnitude is exciting and continues to highlight the Permian Basin as one of the most productive areas for oil and gas in the world, it is important to note that the assessment provided by the USGS includes both undiscovered resources (defined as natural resources that are "estimated to exist based on geologic knowledge and already established production") and technically recoverable resources (defined as natural resources that can be "produced using currently available technology and industry practices"). Estimates for earned profits associated with recovering and refining products that fall into either of these two categories have yet to be determined. While earlier assessments of the nearby Midland Basin portion of the Wolfcamp shale estimated the basin had the potential to hold a record-breaking amount of oil, last week’s assessment is nearly two times larger than the one made in 2016. Discoveries like these will help to keep the Permian Basin competitive in the global oil and gas marketplace.
