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May 3, 2019updated 18 Feb 2022 11:04am

Permian is the growth engine for US onshore hydrocarbon production

Operators in the Permian Basin continue to drill longer laterals beyond 9,000 feet and some reaching as much as 3 miles.

By GlobalData

GlobalData’s latest report on the US Permian Basin shale play reaffirms the region’s growth prospects to 2023.

In a 55-page report, entitled ‘Permian Basin in the US, 2019 – Oil and Gas Shale Market Analysis and Outlook to 2023’, the analytics group states the production of crude oil and natural gas has grown each year from 2013–2018, despite the oil and gas industry going through one of the worst downturns during that period.

Permian Basin outlook

As in other unconventional shale plays, operators in the Permian Basin continue to drill longer laterals beyond 9,000 feet and some reaching as much as 3 miles.

The general objective remains to increase the productivity of the new producing wells in a higher proportion with respect to the cost increase associated with these more complex wells.

The Permian has also seen a clear trend for larger scale operations of key operators that increases the surface of continuous acreage allowing for more recovery.

This has also driven the M&A activity in the Permian with companies like Chevron, Diamondback Energy and Concho Resources looking to expand their Permian footprint to drive greater efficiency and lower production cost.

Moreover, limitations to gas pipeline capacity that gave rise to flaring are estimated to ease during 2019–2020, with approximately 4 billion cubic feet of pipeline capacity expected to be added during these two years, giving a further lift to Permian production.

The major hydrocarbon producing counties in the Permian Basin include Reeves, Midland, Lea, Loving and Eddy.

Total production across major counties in the Permian Basin shale play

Source: GlobalData Thematic Research

Occidental Petroleum, Chevron Corporation, Pioneer Natural Resources, Concho Resources, and EOG Resources were the leading producers in the Permian Basin shale in 2018.

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