Wolfcamp

The Energy Information Administration (EIA) recently raised a few eyebrows across the energy industry with a report that producers in three key shale states — including Texas, the nation’s #1 oil producer — seem to be extracting larger amounts of “heavier” crude oil. Of course, the oil is only heavier relative to the light and superlight grades that have been produced in copious amounts since the dawn of the Shale Revolution. But these denser, lower-API volumes have recently helped drive growth in total crude output. In today’s RBN blog, we unpack what the EIA discussed in its writeup, explore some of the possible drivers behind the apparently heavier oil production, and discuss what it might mean for the domestic market. 

No fewer than 28 publically listed companies are currently drilling in the Permian Basin – including industry stalwarts like Occidental Petroleum, ConocoPhillips, Chevron, and Shell as well as independent producers like EOG Resources, Pioneer Natural Resources, Concho Resources and Apache. Overall crude production is over 1.5 MMb/d and headed to 1.7 MMb/d by the end of 2014. Current hot spots include the Wolfcamp horizontal shale play in the Midland Basin – featured in our latest Drill Down Report. Today we look at new gathering systems in the Midland that will transport up to 490 Mb/d of crude to Crane and Colorado City, TX.