Permian Newsletter, June 2001
Executive Summary
Following is an overview of activity in Southeast New
Mexico. Total production during the third quarter of 2000 from the
Permian Basin was 4,944 MMcf/d,
a decrease of 30 MMcf/d from the second quarter of 2000.
Approximately 29% of this volume came from Southeast New
Mexico. In March 2001,
flows to the Permian Basin from the San Juan Basin from El Paso were
326 MMcf/d and flows were to Transwestern from Permian of 73 MMcf/d,
for a total flow from Permian to San Juan of 253 MMcf/d.
Crude oil spot prices for April were $27.49, an increase of
$.25 from March prices. May
spot natural gas prices at the Waha Hub averaged $4.94, as compared
to $5.01 in April. In
April, there were 117 notices of intention to drill, 49 for gas and
68 for oil, 4 workover completions, 66 well completions and 56
plugged and abandoned wells; 48 of these were oil wells. The count
for active rigs was up to 53 in March from 45 in March.
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 14,000 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 wells.
Four counties contribute to the gas production from this
area. Eddy is the largest gas-producing county in Southeast New
Mexico producing 54% of the region’s total volumes.
Lea is the next largest county contributing 42% of the
region’s production. The
other two counties, Chaves and Roosevelt together only contribute
the remaining 4%.
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