Permian Newsletter, October 2001
Executive Summary
The 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 August 2001, flows to the Permian Basin
from the San Juan Basin from El Paso were 463 MMcf/d and were 84
MMcf/d from Transwestern, for a total flow to Permian from San Juan
of 547 MMcf/d. Crude oil spot prices for August were $27.36, an
increase of $0.79 from July prices. September spot natural gas prices
at the Waha Hub averaged $2.28, as compared to $2.95 in August.
In August, there were 87 notices of intention to drill, 41 for gas
and 46 for oil, 5 workover completions, 42 gas well completions
and 100 oil well completions and 52 plugged and abandoned wells;
44 of these were oil wells. The count for active rigs was 67 in
July, up from 64 in June.
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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