Permian Newsletter, July 2001
Executive Summary
Following is an overview of activity in Southeast New Mexico. Total production during
the fourth quarter of 2000 from the Permian Basin was 4,784 MMcf/d, a decrease of 254
MMcf/d from the third quarter of 2000. Approximately 31% of this volume came from
Southeast New Mexico. In May 2001, flows to the Permian Basin from the San Juan Basin from
El Paso were 476 MMcf/d and from Transwestern were 24 MMcf/d, for a total flow from
Permian to San Juan of 500 MMcf/d. Crude oil spot prices for May were $28.63, an increase
of $1.14 from April prices. June spot natural gas prices at the Waha Hub averaged $3.82,
as compared to $5.01 in May. In May, there were 114 notices of intention to drill, 51 for
gas and 63 for oil, 1 workover completion, 108 well completions and 46 plugged and
abandoned wells; 40 of these were oil wells. The count for active rigs was 47 in May, down
from 53 in April
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 almost 13,900 oil
wells and 4,400 gas wells and is the second largest contributor to volumes in the Permian
Basin. Although 76% of the producing wells in this area are oil wells, only about 38% of
the gas production comes from these oil wells. Four counties contribute to the gas
production from this area. Eddy is the largest gas-producing county in Southeast New
Mexico producing 55% of the region's total volumes. Lea is the next largest county
contributing 41% of the region's production. The other two counties, Chaves and Roosevelt
together only contribute the remaining 4%. |
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