With Permian natural gas production already soaring to an all-time high, the U.S. Energy Information Administration projects that October Permian oil production will surpass the previous record of 4.8 million barrels a day set in early 2020.
After a prolonged multiyear slump, U.S. natural gas prices rallied in the waning heat of late summer to their highest levels in more than seven years. The recovery has occurred largely counter-cyclically to historical seasonal patterns, with prices building momentum through the dog days of summer rather than during the typical winter heating–and to lesser extent, peak summer cooling–seasons when demand is most pronounced.
Strong Prices, Huge Inventories Give Operators Running Room In Permian Stacked Plays
October 2021 Cover Story
It has been a long while since crude oil and natural gas have been priced so strongly at the same time–so long, in fact, that the world had scarcely even heard of the Wolfcamp or Bone Spring the last time oil was trading in the $70s and natural gas was fetching $5 an MMBtu. Yet, those were the price levels in early September as the buzz was building in anticipation of the 2021 Permian Basin International Oil Show.
A healthy oil and gas industry has been vital to the United States’ economic progress for more than a century, and sensible regulation has been key to fostering industry advancement and ensuring its continued success for the benefit of our country, consumers and industry.
For every barrel of oil produced in the Permian Basin, there are at least two barrels of water. In the Delaware Basin, some wells lift 10 barrels of water for every barrel of oil, according to Wood Mackenzie.
Unconventional wells typically follow a hyperbolic decline curve, with many wells’ daily production dropping 40%- 80% in the first year. This rapid decline makes it essential to select artificial lift methods that have a broad operating range and low enough operating costs that they remain economic even when the well approaches the lower end of that range.