Permian Newsletter, July 2001
Executive Summary
Total production for southeast New Mexico during the fourth quarter of 2000 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 July 2001, flows to the Permian Basin from the
San Juan Basin from El Paso were 416 MMcf/d and were 42 MMcf/d from Transwestern, for a
total flow to Permian from San Juan of 458 MMcf/d. Crude oil spot prices for July were
$26.57, a decrease of $1.03 from June prices. August spot natural gas prices at the Waha
Hub averaged $3.13, as compared to $3.07 in July. In July, there were 108 notices of
intention to drill, 41 for gas and 67 for oil, 7 workover completions, 66 well completions
and 84 plugged and abandoned wells; 73 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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