Formations as Markets
The USGS (United States Geological Survey) is a science bureau within the United States Department of the Interior. Found on this link is an expansive Produced Waters Database and should be the starting point of any serious research.
Each basin’s formation water carries distinct characteristics that challenge credulity.
They can stop the drilling but not the flow.
Formation water returns at a factor over 3 for the life of the well.
Treatment systems are not on the rise.
Spending continues to favor disposal.
Pretty big deal.
These two graphs are why private equity funds have been trolling around the Permian the last 2 years
The Permian is the backbone of the U.S. market.
Here’s why.
Enverus.com provides an excellent breakout of the Permian’s historical and future economic prospects.
The Delaware Basin
Located on the western section of the Permian, the Delaware Basin covers a 6.4M acre area, stretching from Eddy county, NM to Pecos county, TX. The Delaware is the deepest of the Permian sub-basins with the thickest deposits of rock. Historically, production focused on vertical development and targeted the Wolfcamp and the Abo/Yeso formations in the Northwest Shelf. The introduction of horizontal drilling, however, has revitalized interest in the Wolfcamp and introduced the Bone Springs as the money-making formations of the Delaware.
Location: Western sub-basin spanning West Texas and SE New Mexico
Primarily unconventional targets
Top Delaware Basin Operators
The Midland Basin
The Midland Basin is in the eastern part of the Permian. It stretches north to south from southern Lamb and Hale counties to northern Crockett county. The Midland has been a hotspot for vertical drilling since the 1940s, though activity took-off in the 1970’s. Previously, the Spraberry was the targeted formation, but with technological advances that allow companies to drill longer horizontals and frac more effectively, the Wolfcamp has become the primary target.
Location: Eastern sub-basin.
Primarily unconventional targets
Top Midland Basin Operators
The Central Basin Platform
The Central Basin Platform sits in the heart of the Permian, between the Delaware and Midland. Primarily vertical wells have been drilled in the CBP related to some of the oldest Permian basin finds. An area of low well costs and consistent returns, this basin has become known as a low-risk, high-reward area to drill. Operators are now looking to bring the latest horizontal drilling and completion technologies to this area. With its long history of production, roughly 45% of the total barrels produced to-date in the Permian have come from the CBP.
Location: A shallow subsurface structure separating the Delaware and Midland basins.
Primarily conventional targets
Top Central Basin Operators
The anatomy of a stacked play.
“ Stacked play refers to the number of commercially viable landing zones that are available on a single surface location.
Arguably the Permian Basin’s defining characteristic is its stacked play, as the thickness of the hydrocarbon column being currently developed is over 2,000 feet in the Midland and Delaware basins, compared to 300 feet and 500 feet in the Williston Basin in North Dakota and Eagle Ford trend in South Texas.”
