Permian Newsletter, XXX 2000
Executive Summary
Following is an overview of activity in Southeast New Mexico. Total production during
the first quarter of 2000 from the Permian Basin was 5,056 MMcf/d, an increase of 226
MMcf/d from the fourth quarter of 1999. Approximately 30% of this volume came from
Southeast New Mexico. In September 2000, flows to the Permian Basin from the San Juan
Basin from El Paso were 547 MMcf/d and flows were to Transwestern from Permian of 111
MMcf/d, for a total flow to Permian of 436 MMcf/d. Crude oil spot prices for September
were $33.88, an increase of $2.62 from August's prices. October spot natural gas prices at
the Waha Hub averaged $4.87, up 37 cents from September. In September, there were 101
notices of intention to drill, 52 for gas and 69 for oil, 5 workover completions, 108 well
completions and 72 plugged and abandoned wells; 55 of these were oil wells. The count for
active rigs was up from 43 in August to 44 in September, with an average so far in 2000 of
49, as compared to 22 in 1999 and 31 in 1998.
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 30% of the volume from the New Mexico side and
70% from the Texas side. The Southeast New Mexico area is comprised of over 31,900 oil
wells and over 8,100 gas wells and is the second largest contributor to volumes in the
Permian Basin. Although 79% of the producing wells in this area are oil wells, only about
38% of the gas production comes from these wells. |
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