July 02, 2018

Permian Basin To Be World's #3 Oil Producer in the Next Six Years

Talk oil and the first thing that comes up is OPEC… or perhaps Texas. Almost certainly it won't be the Permian Basin, which goes to show that sometimes the most significant things in plain sight go unnoticed. Texas denotes everything big about the USA, and this emphatically applies to the country's oil production capabilities. Surprisingly, the Permian is the largest oil basin in the US - covering 75,000 square miles over the Western part of the state and Southeastern New Mexico. However, it isn't the expanse of land that’s surprising: it’s the vast reserves of oil beneath it and the ingenious technologies used for extraction. Outside of Russia and Saudi Arabia, the Permian Basin is heading to be the third biggest oil producer in the world. To give perspective, if it were a member of OPEC, Iraq would soon be displaced as the 2nd lead nation in the cartel. The "Basin" has already bypassed Iran, Mexico, Nigeria, China, Canada, and Kuwait. It is expected to reach 5.4 million barrels per day (bpd) sometime over the next six years and accounts for over 25 percent of the 11-billion bpd national production right now. Natural and liquid gas output will double by 2023. The "Permian Impact" on the US economy is analogous to the spectacle of a sleeping giant coming out of hibernation. The country as an exporter will explode onto foreign markets on the back of an eye-popping 263% production boost to 4-million bpd by next year – a new force to be reckoned with. Hydraulic fracturing, the fuel behind the region’s jet propulsion, was all but derailed as oil prices plunged in 2014. This innovative technique releases oil and gas from shale formations and then collects it in horizontal wells. Disruptions aside, today the Permian Basin leads the US oil renaissance because great companies like Chase Energy Services have found new ways to “frack” cost efficiently. Demands on the “frackers” are daunting: the 41,000 new wells required to meet lofty future goals isn't even the big gorilla in the room. No, the make or break of the USA as an oil export superpower rests on pipeline development, which will suck up the lion's share of the expected $308 billion new investment into the region. Naturally, if the oil can't be stored and moved (logistics), prices will be discounted no matter how much is drilled. In a nutshell: production clashes with logistics almost all the way, even as progress looks optimistic. Still, the key players understand the variables of the Permian Basin. In the heralded US entrepreneurial spirit, we believe the logistics will be solved, and the potential of the Permian Basin will raise it to worldwide prominence.


Chase Energy Services

Chase Energy Services is one of the largest privately held integrated oilfield services company in the US, providing end-to-end oilfield services through an experienced management team, innovative technologies and an unrelenting focus on safety. With more than 500 employees, the company serves customers across Southwest New Mexico and West Texas in frac and acidizing, well construction and completion, cementing solutions and well servicing. learn more