As everyone in the World knows, things are bigger in Texas. They just are. According to a survey released on November 18, 2016, by the US Geological Service, the Midland Basin of the Wolfcamp Shale area in the Permian Basin is now estimated to have 20 billion barrels of oil and 1.6 billion barrels of natural gas. Oil has been produced in the Wolfcamp since the 1980s via traditional horizontal wells. In fact, more than 3,000 horizontal wells are currently operating there. That makes it three times larger than the current assessment of recoverable oil in the Bakken formation in North Dakota.
On November 10, 2016, the USGS estimated a mean continuous oil of 12 billion barrels of oil and 75 trillion cubic feet of gas in the Bazhenov Formation of the West Siberian Basin Province, Russia. Click here to read more: https://pubs.er.usgs.gov/publication/fs20163083).
Getting back to Texas, interestingly, this estimate would make this the largest “continuous oil” discovery in the U.S. The term continuous oil refers to unconventional formations where oil exists throughout the formation and not in discrete pools. The USGS estimates how much oil is considered to be undiscovered but technically recoverable. Thus, even in established areas, when technology changes that allows for additional barrels to be recovered, the USGS must revise its assessment to account for that change.
Right now, about 50-60% of the oil is probably recoverable using current technology. Interestingly though, if one considers the history of fracking, one understands why more and more oil becomes recoverable. In 2000, only about 23,000 fracking wells existed and pumped about 102,000 barrels per day. As of March, 300,000 fracking wells were producing 4.3 million barrels per day.
Interestingly, this discovery concides with an report from the EIA. Oil drilling is now increasingly focused in the Permian basin. The Permian now holds nearly as many active oil rigs as the rest of the United States combined, including both onshore and offshore rigs, and it is the only region in EIA’s Drilling Productivity Report where crude oil production is expected to increase for the third consecutive month.
After the huge discovery in Texas, and the one in Russia, does anyone have any doubt the world is drowning in oil?
By: Ty Chapman
Five Star Metals, Inc.
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