The report provides a comprehensive review of hydrocarbon appraisal and development in the Permian Basin against the backdrop of the COVID -19 pandemic. The report also provides an outlook for oil and gas production in this play till 2025 along with the competitive positioning of major operators.

The Permian Basin located in the states of Texas and New Mexico is the largest oil-producing region in the US. In 2019, the basin averaged over 4.3 million barrels of oil per day (mmbd), peaking at 4.7 million in December 2019. During 2020, oil production averaged over 4.8 million barrels of oil per day (mmbd) from January to March before the pandemic-led demand crash that resulted in a production drop to an average of 4.3 million from April to December 2020.

The lowest level of crude and condensate production was reached in September 2020, at 4.2 mmbd or 12.5% below March 2020 levels. While natural gas production reached the lowest volumes of 14.8 bcfd in May 2020, which was a 14% drop compared to March 2020.

Permian Basin market overview

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What are the market dynamics of the commodities produced in the Permian Basin?

The Permian Basin is the largest oil-producing region in the US and was the most affected play in the country during the COVID-19 pandemic. At the beginning of 2021, there was a slow recovery in production until mid-February when a massive winter storm caused major disruptions to drilling activity and production facilities throughout the Permian Basin. Companies like Occidental Petroleum and Pioneer Natural Resources reported shut-in production as a direct cause of the storm. If current oil and gas markets remain steady and continue their slow rise, the Permian Basin is on track to reach pre-pandemic production rates by 2022.

With the introduction of COVID-19 vaccines for the public and throughout the workforce, consumer demand is slowly beginning to rise, and with it, an increase in WTI pricing and drilling activity. Throughout mid-2020 into 1Q 2021, many companies sold off assets, acquired new ones, and went about restructuring their organizations. It is becoming clear that many Permian Basin companies are refocusing their attention on their core asset and ramping up drilling and completion programs as WTI prices continue to climb. Moreover, between January 2019 and May 2021, more than 21,000 new permits were issued cumulatively for wells in the Permian Basin, with the majority of permits issued for wells in Texas. Permit activity in the Permian Basin increased marginally in 2019 from 2018. However, the activity reduced by 1% during the second half of 2019, showcasing smaller movements. Moreover, the year 2020 witnessed a steeper fall in permit activity owning to the COVID-19 outbreak. Since the start of the year, the oil price crash made shale drilling uneconomical. However, the year 2021 has started relatively well in terms of permit activity in the Permian Basin. This can be attributed to the recent recovery in oil prices.

What are the recent mergers and acquisitions in the Permian Basin?

Occidental Petroleum Corp entered into a definitive agreement to sell non-strategic acreage located in the Permian Basin to an affiliate of Colgate Energy Partners III, LLC on June 10, 2021. The purchase consideration is worth $508 million. The transaction along with the recent acquisition of Luxe assets has strengthened Colgate Energy’s position in Permian Basin. Increased business activities and access to more liquidity has enabled the company to boost its development programs.

What are the major counties producing crude oil and condensate and natural gas in the Permian Basin in 2020?

In 2020, Lea county in New Mexico was the largest producer of crude oil and condensates in the Permian Basin, followed by Eddy, Reeves, Loving, and Midland counties. In 2020, Reeves county from Texas was the largest producer of natural gas, followed by Eddy, Lea, Culberson, and Loving. 

Major counties in Permian Basin, by production of crude oil and condensate

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Who are the major players in the Permian Basin?

In 2021, Occidental Petroleum had the highest leasehold by net acres in the Permian Basin, followed by Apache Corp, Chevron Corp, Exxon Mobil Corp, and Pioneer Natural Resources. Occidental Petroleum is one of the largest producers of crude oil and natural gas from this play. Exxon Mobil Corp led the market with a strong financial standing followed by BP Plc, Chevron Corp, Occidental Petroleum, EOG Resources, and Pioneer Natural Resources during the same period.

Major players in Permian Basin, by financial holdings

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Market report scope

The report analyses the crude oil and natural gas appraisal and production activities in the Permian Basin in the US. The scope of the report includes: 

• Comprehensive analysis of crude oil and natural gas historical production and outlook during 2018-25
• Detailed information of impact on well development, permits, and deals against the backdrop of the COVID-19 pandemic
• In-depth information of well productivity and well completion parameters across Permian Basin in the US
• Analysis of top companies’ net acreage, planned capital expenditure in 2021, as well as crude oil and natural gas reserves and production stats as of 2020
• Up-to-date information on major mergers and acquisitions across the Permian Basin between 2019 and 2021

Reasons to Buy

• Develop business strategies with the help of specific insights into the Permian Basin in the US
• Plan your strategies based on economic viability and expected developments in the Permian Basin
• Keep yourself informed of the latest M&A activity across Permian Basin
• Identify opportunities and challenges across Permian Basin