Permian Newsletter, October 2000
Executive Summary
Following is an overview of activity in Southeast New Mexico. Gas volumes produced in
the Permian Basin averaged 4,832 MMcf/d for the fourth quarter of 1999; approximately
one-third of this volume came from Southeast New Mexico. In August 2000, flows to the
Permian Basin from the San Juan Basin from El Paso were 509 MMcf/d and flows were to
Transwestern from Permian of 125 MMcf/d, for a total flow to Permian of 495 MMcf/d. Crude
oil spot prices for August were $31.26, an increase of $1.56 from July's prices. September
spot natural gas prices at the Waha Hub averaged $4.50, up 46 cents from August. In
August, there were 50 notices of intention to drill, 16 for gas and 34 for oil, 8 workover
completions, 57 well completions and 32 plugged and abandoned wells; 25 of these were oil
wells. The count for active rigs was down from 45 in July to 43 in August, 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 25% of the volume from the New Mexico side and
75% from the Texas side. The Southeast New Mexico area is comprised of over 14,100 oil
wells and over 4,300 gas wells and is the second largest contributor to volumes in the
Permian Basin. This area contributes over 29% of the total region's gas production.
Although 76% of the producing wells in this area are oil wells, only about 39% of the gas
production comes from these wells. |
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