Permian Basin

The Permian Basin is and will remain the key oil resource of the U.S. onshore because its deep and varied formations hold at least a century’s worth more of resource opportunities that eclipse any other part of the country, Pioneer Natural Resources Inc. CEO Scott Sheffield said Tuesday.

Oil and natural gas production from the nation’s seven largest unconventional plays, which has been on a downward trend since last fall, will slip again in August, according to the Energy Information Administration (EIA).

The New Mexico office of the Bureau of Land Management (BLM) said it has postponed an oil and gas lease sale of Permian Basin property scheduled for Wednesday until early September on the grounds that it wants to provide adequate public notice of the sale.

More U.S. land-based drilling rigs returned to play in the Baker Hughes Inc. (BHI) rig count released Friday, but the pace of return slowed from the previous week. The Permian Basin turned in another strong showing.

Few mega-deals have hit the oil and gas sector for awhile, but North American oil and gas transactions have accelerated, particularly in the Permian Basin and in Oklahoma, as commodity prices strengthen, the bid/ask spread tightens and capital markets access improves, Fitch Ratings said Thursday.

Austin, TX-based Luxe Energy LLC has been identified as the seller in a $560 million deal with Diamondback Energy Inc. for assets in the Permian Basin’s Delaware sub-basin (see Shale Daily,July 13). Luxe, formed in 2015 by Natural Gas Partners’ NGP Natural Resources XI LP, acquired the Delaware properties in early 2016 (see Shale Daily,Jan. 22;May 14, 2015). Luxe CEO A. Lance Langford said the company planned to work with NGP to “identify, evaluate and execute on additional acquisition opportunities.” The Diamondback transaction is expected to be completed in September.

Diamondback Energy Inc., which has become an exploration master in the Permian Basin’s Midland sub-basin, is grabbing more Texas leasehold in a $560 million agreement that gives it entry into the basin’s twin prolific play, the Delaware.

Resolute Energy Corp. is peeling off more of its Permian Basin midstream portfolio in Texas to devote more money to ever-better oil and gas wells within the Wolfcamp formation, the Denver-based producer said Friday.

More than 30 business entities and individuals in Texas, including Fort Worth’s Kimbell Art Foundation, are suing Chesapeake Energy Corp. based on claims that the company structured a series of contracts to receive excessive fees and other charges after its 2009 sale of Barnett Shale midstream assets.