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‘Game-Changing’ new research on prolific Permian Basin estimates 60 billion to 70 billion barrels remain

‘Game-Changing’ new research on prolific Permian Basin estimates 60 billion to 70 billion barrels remain thumbnail

Energy researchers at IHS Markit have completed the first, three-year phase of a massive Permian Basin research project that models and interprets the giant basin’s key geologic characteristics to better estimate its remaining hydrocarbon potential, and initial results indicate the giant basin still holds an estimated 60 billion to 70 billion barrels of technically recoverable resources.
To conduct this new analysis, researchers used the IHS Markit historical well and production database that includes more than 440,000 Permian Basin wells, and a new proprietary software tool that, for the first time, enables them to leverage interpreted formation ‘tops’ data to identify accurate formations for completion intervals on hundreds of thousands of wells. These results significantly alter the understanding of the Permian Basin’s resource potential, according to new analysis from IHS Markit (Nasdaq: INFO), a world leader in critical information.

“When a geologist looks for new oil reserves, we typically go back to geologic targets where we know oil was targeted and produced previously, and in a well file, we call those targets the producing or completion formations,” said John Roberts, executive director, global subsurface content operations at IHS Markit. “This producing formation data is a critical element in assessing and correlating future drilling and production activity, but since that information is highly competitive, many operators have historically under-reported that information, which has created much ambiguity in the data.”

Roberts, along with Prithiraj Chungkham, director of unconventional resources at IHS Markit, co-authored The Permian Basin Interpreted in 3D: The IHS Markit Permian Basin Unconventionals Kingdom Geology Project.

“Using a new technology we developed, we’ve leveraged our proprietary IHS Markit interpreted formation-tops data to identify accurate formations for completion intervals on hundreds of thousands of wells, and the results change the game for this basin and for geologists’ interpretations,” Roberts said. “It has significantly changed our understanding of the extent of many formations in the Permian Basin and the potential of those formations to yield additional hydrocarbons.”

Roberts said the IHS Markit team spent thousands of hours and more than three years building the technology and using it to ‘rigorously and methodically’ update the company’s hundreds of thousands of historical well and production records that cover the Permian Basin’s nearly 100-year history.

“We’re a mix of geologists, private detectives and data scientists who have new tools that now enable us to re-examine the historical data and completely reassess the potential of this mature, giant basin in a 3D model,” Roberts said. “I’m one of more than 60 geologists who have been recording and correlating formation ‘tops’ data for the Permian Basin for over 30 years, so this represents a lifetime of work for many of us, and it’s exciting to finally see the pieces of the puzzle fall into place. For a scientist, it’s like looking through a more powerful microscope and suddenly seeing something clearly for the first time—it is very exciting,” Roberts said.

The Permian Basin, which is a mature hydrocarbon basin located primarily in west Texas and extending into southeastern New Mexico, has produced more than 39 billion barrels (cumulative) of oil since it first began production in the 1920s, reaching a previous production peak in 1973. As conventional oil production in the play declined steadily during the following three decades, many in the industry thought the Permian’s best days were behind it, but unconventional drilling and completion technology changed the game in the 2000s. This advance made possible the extraction of unconventional shale resources that were previously uneconomic to produce, and changed the view of geologists, who, for decades, had bypassed these less desirable targets in favor of conventional reservoirs.

With the onset of horizontal drilling and new completion technology during the past decade, the production decline in the Permian has been reversed and the basin is on track to soon eclipse its previous peak, according to IHS Markit.

“The Permian Basin is America’s super basin in terms of its oil and gas production history, and for operators, it presents a significant variety of stacked targets that are profitable at today’s oil prices,” Chungkham said. “In this analysis, we’ve modeled and interpreted more than 70 formations and benches across the Permian Basin and have delivered them in a work-station-ready 3D format, so Permian operators or new-entrants can fast-forward their analysis. In particular, the tremendous improvement in assigned-producing formations adds significant detail and dramatically changes the views of the basin and our understanding of where future hydrocarbon potential exists, allowing for faster economic evaluation of acreage and productive potential. Based on our IHS Markit analysis, a previously undiscussed opportunity for production may be from the tight, non-continuous plays produced through short-lateral wells and low-volume fracking. This offers lower risk, improved upside potential and ultimately, lower recovery costs, which is good news for operators,” Chungkham said.

Given the concerns about a potential crude supply shortage in the medium term, understanding the economic limits of both geography and geology in the Permian is key for operators and investors, Roberts said. Independently, such in-depth data interpretation and analysis can be extremely time consuming and expensive, which has driven demand for this interpreted, 3D-modeled work-station-ready dataset.

“It enables operators to fast-track their existing interpretation efforts in the play or to enter new parts of the play,” Roberts said. “To our knowledge, this is the most ambitious, comprehensive Permian Basin geologic interpretation analysis and modeling project of its kind to date, but we’re not done yet. We are already at work on the second phase of the Permian Basin analysis, which is to further delineate the various Wolfcamp sub-benches.”

The Permian Basin Interpreted in 3D: The IHS Markit Permian Basin Unconventionals Kingdom Geology Project contains a 3D geological model (IHS Kingdom™) of more than 70 geologic formations (from the Basement to the Upper Permian), built using IHS Markit proprietary interpreted tops data, which has been used to assign corrected producing formations for all producing wells. The project includes more than 440,000 updated wells, the interpreted tops, digital logs and allocated production data. It also contains various analytical data including zone attributes, GRID files and the results of analysis of 52 plays comprised of 11 shale (continuous type) and 41 stratigraphic-structural (non-continuous type). These analyses incorporate PRODFit™ (Producing Formation from Interpreted Tops), a new well-production database enhancement that is just now coming online and is being delivered to customers.

Penn Energy

72 Comments on "‘Game-Changing’ new research on prolific Permian Basin estimates 60 billion to 70 billion barrels remain"

  1. Davy on Tue, 26th Sep 2017 6:52 pm 

    It is you that is acting like a dork by talking about death casually on the internet to someone who thinks you are a dork. Go talk to your therapist.

  2. makati1 on Tue, 26th Sep 2017 7:02 pm 

    Davy, perhaps you are not aware that the Ps economy does not hang on the US sucess or the USD?
    That it can survive without the US?
    That it can and does trade with most of the Asian countries including China?
    That it is not drowning in debt like the US?
    That most of it’s citizens don’t even have bank accounts, loans, credit cards, or even cars?
    That Filipino culture is thousands of years old and they have survived and flourished thru more than a financial collapse?

    YOU are the one who will suffer the most, not me or the people here. It is the US food supply that will go down. The Ps will manage quite well on rice and fish if necessary. Most already do.

  3. Davy on Tue, 26th Sep 2017 7:13 pm 

    If there is a war in NK you are toast mkat. The economy in the P’s is going to fold. Don’t worry about the US and its relationship with the P’s in that situation. Mkat, who cares about you insignificant overpopulated little Island. You spend an inordinate amount of time telling us how special your insignificant little island is. I would be embarrassed talking about my insignificant little state constantly. I think it is an insecurity issues with you mkat. You made a poor choice leaving the US and turning your back on your family for a Filipino boyfriend. That is probably a little bit of what is going on and why you are so obsessed with telling us how special your little slum hole is.

  4. GregT on Tue, 26th Sep 2017 7:13 pm 

    ” You better watch your back because these days the P police are getting bad about extrajudicial killings.”

    Extrajudicial killings by the police in the USA.

  5. Davy on Tue, 26th Sep 2017 7:21 pm 

    grehg quit sceering me, you bully.

    LOL what a dork

  6. GregT on Tue, 26th Sep 2017 7:31 pm 

    Stay on the farm, pay your taxes, and you shouldn’t have anything to be sceered about Davy. Unless they decide to exercise Obama’s executive national defence resources preparedness order.

  7. Davy on Tue, 26th Sep 2017 7:34 pm 

    thanks for the advice grehg you are swell

  8. GregT on Tue, 26th Sep 2017 8:06 pm 

    You’re welcome Davy.

    Thanks for the compliment!

  9. makati1 on Tue, 26th Sep 2017 8:15 pm 

    Davy, you have ZERO knowledge of the Ps or their position to survive. Your delusions and Asia phobia is warping your mind. You want so bad for the rest of the world to suffer more than you will that you cannot see realty. Ah well, it will be a very painful awakening for you and yours soon.

    These 7,000+ “little islands” will manage quite well. So will I, much to your frustration. LOL

  10. makati1 on Tue, 26th Sep 2017 8:27 pm 

    Shh, Greg. Davy doesn’t want to see the police state he lives under. The prez has so many powers now, thanks to Bush Jr and O, that he has no real freedoms left.

    600,000+ laws on the books, some of which he breaks daily. That he is watched and recorded everywhere he goes. His purchases are tracked. His phone calls recorded. His every keystroke on the interment a matter of record. He needs a passport to go to Mexico and Canada now. He has to be x-rayed, scanned and patted down to leave or enter his own country, even to fly to a nearby city. He is in prison and doesn’t even see it. American brainwashing is the ‘frog in the pot’ story big time.

  11. Davy on Tue, 26th Sep 2017 8:28 pm 

    Zero, is an extreme quantifier mkat. I do know it is an insignificant overpopulated little island that you talk about constantly. That indicates to me you have deeper personality issues. Why, maybe you made a mistake. Maybe you wish you could come home but are too proud to. Maybe you want to come home but to who? I imagine no one wants you around. I think you are a lonely old man in his last days of life suffering depression and that depression is responsible for your anger.

  12. Davy on Tue, 26th Sep 2017 8:32 pm 

    We are fine here mkat. It’s definitely better than Duarte’s hell but I appreciate your concern.

  13. makati1 on Tue, 26th Sep 2017 8:36 pm 

    Davy, you know ZERO about conditions here. You only ‘know’ what you have read in the US MSM propaganda. You have never been here. About like knowing what the moon is like. Your phobias and need for others to be worse off than you are warps your perception of reality.

    Again you make up this fantasy world of Makati1. I have no intentions of EVER going back to the FSofA. My family can come here and visit me from now on. I could go back and live with any of my family as they have already invited me, but they know I like it here and will stay. Keep trying to put me down if it makes you feel superior. It doesn’t bother me. I consider the source and it is meaningless.

  14. makati1 on Tue, 26th Sep 2017 8:39 pm 

    What concern Davy? I am not concerned about you. You are nothing. Just one more of those America enablers that deserve what is coming.

  15. Davy on Tue, 26th Sep 2017 8:46 pm 

    100MIL people in the space of Arizona and the GDP of widdle Missouri. Lol, that is all I need to know about Duarte’s Hell.

  16. Davy on Tue, 26th Sep 2017 8:50 pm 

    Mkat, you hate me? I hope so. I hope you get what is coming to you too. Being 75 means you face lots of discomfort.

  17. makati1 on Tue, 26th Sep 2017 9:07 pm 

    Davy, the city people will return to the countryside when the SHTF. Most every person that lives in Manila has a home/farm outside to go to. Many commute daily. Most of the condos here are rented, not owned. They will empty quickly.

    But then, the need will not be as great here as in the US. Where will the 160+ million US city dwellers go? They have no family/farms to return to.

    Another case of your ‘wishful thinking’ that is totally wrong. Hate you? Nope! I do pity you for your need to putdown anyone who disagrees with you. Must be that 1%er upbringing. The need to be better than…

  18. makati1 on Tue, 26th Sep 2017 9:14 pm 

    As for “facing discomfort”. How do you figure that? I don’t have to worry about freezing to death. Having a heat stroke. Forest fires. Drought. Starving. The IRS. The NSA. The need to pay taxes. I owe no one. Doesn’t sound like hell to me.

    When the SHTF, I will just disappear from the US records and enjoy my years in a green, peaceful location with friends and, maybe family, if they make the choice. I do not fear the future. I look forward to it. Many years of it. With luck, I have another 20 years. Do you? I doubt it.

  19. Green People's Media on Tue, 26th Sep 2017 10:01 pm 

    How come this IHS Markit team is so very, very far off from Art Berman’s estimates about the Permian basin’s future reserve potential? You wonder.

    Berman estimates something like 1/15th of what these guys are saying. Are they pumping and dumping a portfolio of stocks, or what is up with the absurd over-estimate here.

  20. coffeeguyzz on Tue, 26th Sep 2017 10:33 pm 

    This could be an excellent opportunity to review the last 5 years or so of Art Berman’s writings.
    He is consistently a true gentleman in his interacting with critics, but he has a horrendous track record in his analysis.

    Googling real world data and his writings clearly show this.

  21. Davy on Wed, 27th Sep 2017 5:47 am 

    Mkat, get a friggen grip 100MIL people in the space of Arizona. Luzon is worse with 53MIL:
    See, where I get your agendist narrative is I agree with you 160MIL Americans may have to depopulate large cities. Yet, there is ample space to depopulate into. That is not to say once they get there they will manage well considering few have agricultural skills but we have places to go. Your overpopulated Island of the P’s further reduce to a massively overpopulated Luzon has nowhere to go. You cannot avoid a large die down. You being 75 will be among the first to go. It will be the young Filipinos who survive. You can’t do much but whine.

  22. rockman on Wed, 27th Sep 2017 2:58 pm 

    Damn, no one wanted to play the guessing game? OK, one last chance. And I promise not make fun of any answer no matter how dumb:

    A) how much oil will the US be producing in 2030 if the PB has 60 billion bbls of technically recoverable oil reserves?

    B) how much oil will the US be producing in 2030 if the PB has only 6 billion bbls of technically recoverable oil reserves?

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