Permian Newsletter, April 2000
Executive Summary
Gas volumes
produced in the Permian Basin averaged 4,927 MMcf/d for the second quarter of 1999;
approximately one-third of this volume came from Southeast New Mexico. In February 2000,
flows to the Permian Basin from the San Juan Basin from El Paso were up to 637 MMcf/d, but
gas continued to flow from Permian on Transwestern, for a net flow to Permian of 623
MMcf/d. Crude oil spot prices for February were $29.37, which is the highest price in the
past three years and March spot natural gas prices at the Waha Hub climbed to $2.59. In
February, there were 74 notices of intention to drill, 2 workover completions, 68 well
completions and 47 plugged and abandoned wells; 38 of these were oil wells.
Background
The
Permian Basin occupies approximately 70-80 thousand square miles and includes 51 counties
in west Texas and four counties in southeastern New Mexico. The basin is bounded
structurally on the east by the Bend arch, on the north by the Amarillo-Ouachita uplift,
on the west by the Sacramento Mountains and on the south by the Marathon thrust belt.
Sedimentary rocks within the basin are as much as 30,000 feet thick in the deepest areas.
Nearly all the rocks are of Paleozoic era within a thin veneer of Mesozoic strata at the
surface. Carbonates, both limestone and dolomite, are the dominant lithology. The basin
currently produces just over 5 Bcf/d, with 25% of the volume from the New Mexico side and
75% from the Texas side. Almost 50,000 wells, of which 34,000 are oil wells, are contained
in this basin. The current estimated remaining recoverable reserves for southeastern New
Mexico is 2.6 Tcf of gas and 719 million barrels of oil. Total gas production from
southeastern New Mexico has increased steadily over the last ten years, from 1.1 Bcf/d in
1988 to over 1.4 Bcf/d during 1997. Oil production from this area during the same period
has remained relatively flat, at just over 60 million barrels per year. |
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