Shale oil is booming in west Texas, defying the global energy slump and attracting investment from oil behemoths across the industry.
Production in the Permian Basin is the only play in the U.S. shale market increasing as oil prices continue to linger below $50 a barrel. The Permian Basin is the largest in America, helping ignite the U.S. fracking boom and showing no sign of letting up, reports Bloomberg.
Production in the Permian Basin is expected to rise another 0.6 percent in December, totaling 2.02 million barrels a day. Other shale plays aren’t fairing so well. The Bakken and Eagle Ford shale plays are down 12 percent and 25 percent respectively, leading Exxon Mobile and other oil companies to focus efforts on the Permian for its competitive energy opportunities.
“We’re already seeing a lot of people that are targeting the Permian,” Allen Gilmer, CEO of Drilling Info Inc told Bloomberg. “If you were to look for the most stable area today to go do anything, it’s got to be there. Today you might even argue it’s more stable than Saudi Arabia.”
Exxon already has holdings in the Permian Basin, making two deals in August for 48,000 acres of shale fields. The company is currently in talks with smaller producers to expand its property in the region. Anadarko Petroleum has also showed interest in the area, surprising the markets last week with an offer to buy out Apache Corporation, an American oil and gas company with major holdings in the Permian Basin. The offer was later withdrawn, reports the Calgary Herald, but illustrates the growing demand for land holdings in the dynamic resource rich region.
The oil rich Permian Basin is becoming a beacon to the rest of the industry which is mired in the lingering effects of OPEC’s long term low price strategy. It’s easy to see why the region is such a lure for energy investors, as just one layer of the Permian Basin contains 75 billion barrels of oil, which would last the world two years, according to Bloomberg.
“It’s the last oil basin standing,” said CEO of Concho Resources Will Giraud. “It’s the last place you can drill in this environment and make money. It’s the last place where there’s still a tremendous amount of resources to be discovered.”
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