Introduction…Oil production increasing in west Texas Permian Basin, the largest U.S. shale-oil region, as the Bakken and Eagle Ford are experiencing production declines.
West Texas two-lane county roads are congested with trucks as energy companies are searching for deals even though the oil markets are in the worst condition of decades.
On October 26, 2015 we reported (http://oilandgasinsider.com/?p=449) a Chinese investment holding company signed a letter of intent to purchase West Texas oil fields in Howard and Borden Counties for $1.3 billion.
Companies like Exxon Mobile, Corp. to Anadarko Petroleum Corp. have also searched for assets in this region the size of Syria. Exxon purchased 48,000 acres in two deals in August and is reportedly looking for additional acquisitions.
“We’re already seeing companies targeting the Permian,” said Alen Gilmer, chief executive officer of Austin-based Drilling Info. “If you were to look for the most stable area today to do anything, it’s going to be there. Today you might even argue it’s more stable than Saudia Arabia.”
In summary…Oil production in the Permian is forecasted by the EIA to rise 0.6% in December to 2.02 million barrels a day evan as drillers idled 59 percent of rigs. The rival shale fields, the Bakken and Eagle Ford, have fallen 12 percent and 25 per cent respectively.
Source: “Oil Producers Hungary for Deals Drool Over West Texas Tiramisu,” BloombergBusiness by Dan Wethe, November 15, 2015.