Permian Newsletter, May 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 299 MMcf/d and flows were to
Transwestern from Permian of 309 MMcf/d, for a total flow from
Permian to San Juan of 10 MMcf/d. Crude oil spot prices for March
were $27.24, a decrease of $2.37 from February's prices. April spot
natural gas prices at the Waha Hub averaged $5.29, as compared to
$4.95 in March. In March, there were 116 notices of intention to
drill, 45 for gas and 71 for oil, 3 workover completions, 100 well
completions and 63 plugged and abandoned wells; 49 of these were oil
wells. The count for active rigs was down to 45 in March from 48 in
February.
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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