Drilling Down: Permian Basin Dominates Drilling Permit Filings in New Year
Mon, January 21, 2019
Nearly three-fourths of the 245 drilling permits filed with the Railroad Commission during the first week of 2019 were from the prolific West Texas shale play.
Of the 48 exploration and production companies that applied for those drilling permits, Pioneer Natural Resources of Irving led with 19 applications for projects targeting the Spraberry field in Irion, Martin and Upton counties.
Following Pioneer were XTO Energy, an Exxon Mobil subsidiary, with 17 drilling permit filings, Canadian oil company Encana with 12 applications and Midland exploration and production company Endeavor Energy Resources with 11.
Blessed with several oil and natural gas-rich geological layers, the Permian Basin has become the top shale play in the United States. As part of a phenomenon known in the oil and natural gas industry as “Permania,” nearly half of the active drilling rigs in the United States can be found in the Permian Basin.
The West Texas shale play finished 2018 producing nearly 3.75 million barrels of crude oil per day, according to the Energy Department.
Not everyone in the Permian Basin is developing oil or natural gas wells. Houston pipeline company Plans All American Pipeline has filed for a trio of drilling projects in Fisher, Howard and Stonewall counties. The company is drilling three cathodic wells, in which corrosion-prevention equipment is placed, to protect a pipeline project in the area.
Eagle Ford Shale
Fort Worth oil company MD America Energy continues to carve out a niche in the eastern end of the Eagle Ford Shale. The company filed a drilling permit application for a horizontal oil well targeting the Madisonville field of the Woodbine geological layer in Madison County at a total depth of 9,200 feet.
Founded in March 2014, the Fort Worth oil company has filed 63 drilling permits over the years for projects in Brazos, Leon, Grimes and Madison counties. Wells on MD American Energy's 184 leases in Texas produced more than 1.4 barrels of crude oil and more than 4.4 billion cubic feet of natural gas in 2017, Railroad Commission records show.
The Haynesville is natural gas play dominated Exxon Mobil and BP, but it is also home to smaller companies. Mt. Enterprise exploration and production company KJ Energy is seeking permission drill a horizontal gas well targeting the Brachfield SE field of the Cotton Valley geological layer down to a total depth of 10,260 feet.
KJ Energy has filed for 33 drilling permits since it was founded in April 2015. All of the company's projects are in the Haynesville Shale of East Texas. Wells on the company's 267 leases in Texas produced more than 42,000 barrels of crude oil and nearly 9.3 billion cubic feet of natural gas in 2017, Railroad Commission data shows.
No drilling permit applications were filed for horizontal drilling projects in the North Texas shale play during the first week of the New Year. Boerne-based Guidance Oil Developers was the only company to file a drilling permit for a new well in the region. The company received a drilling permit for a vertical well on its Copeland lease in Young County, where it is targeting the Y-B field of the Gunsight geological layer down to a depth of 1,400 feet.
Wells on Guidance's 21 leases in Texas produced nearly 27,000 barrels of crude oil and no measurable amount of natural gas in 2017, Railroad Commission data shows.
The Coastal Bend remains popular among conventional oil drillers. Three oil companies plan to drill three vertical wells in the region. Spring-based Forza Operating plans to drill one in Colorado County while Kingwood based Foundation Oil Company is planning one in Hardin County. Plano-based Urban Oil & Gas Group is planning to drill one in Matagorda County.