Permian Newsletter, May 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 March 2000, flows to the Permian Basin from the San Juan Basin from El Paso
were up to 645 MMcf/d, but gas continued to flow from Permian on Transwestern, for a net
flow to Permian of 514 MMcf/d. Crude oil spot prices for March were $29.84, which is the
highest price in the past three years and March spot natural gas prices at the Waha Hub
climbed to an average of $2.79. In March, there were 138 notices of intention to drill, 2
workover completions, 81 well completions and 59 plugged and abandoned wells; 50 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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