Permian Newsletter, June 2000
Executive Summary
Gas
volumes produced in the Permian Basin averaged 4,931 MMcf/d for the third quarter of 1999;
approximately one-third of this volume came from Southeast New Mexico. In April 2000,
flows to the Permian Basin from the San Juan Basin from El Paso were up to 651 MMcf/d, but
gas continued to flow from Permian on Transwestern, for a net flow to Permian of 643
MMcf/d. Crude oil spot prices for April were $25.72, which is the lowest price since
November 1999. April spot natural gas prices at the Waha Hub climbed to an average of
$2.87. In April, there were 88 notices of intention to drill, 4 workover completions, 59
well completions and 39 plugged and abandoned wells; 28 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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