Permian Basin

In the United States, two more oil-directed rigs entered the hunt, according to the latest Baker Hughes Inc. rig count released Friday (Aug. 21). Meanwhile, oil prices dropped below $40/bbl for the first time since 2009. If companies are actually making money at these prices, then that darkens the outlook for price recovery, analysts warned.

The developer of a water supply project for West Texas is hoping that by the time his pipelines are online, commodity prices will have entered recovery mode. STW Water Process & Technologies recently bought a second brackish water lease in the Fort Stockton, TX, area to support its West Texas Water Project.

Permian pure-play operator Parsley Energy Inc. said it plans to keep running four rigs through the rest of the year and notched up its production guidance, as it also launches a transition to pad drilling and begins to appraise the development potential of a prospect in the Southern Delaware Basin.

Fresh from closing an acquisition that significantly increased its size, Ring Energy Inc. said it plans to limit drilling for now but is actively looking for more merger and acquisition (M&A) opportunities to become a premier exploration and production (E&P) company focused on the Permian Basin.

Permian-focused Energen Corp. said it will increase its capital expenditure (capex) budget by 10%, to $1.1 billion, for the full-year 2015 so it can focus on development and appraisal programs in the Wolfcamp and Spraberry formations, and expects the company’s overall production to increase by nearly 20% as a result.

Permian pure-play operator Laredo Petroleum Inc. said it increased production by more than one-third and slashed production costs during the second quarter. Meanwhile, the company plans to sell a chunk of its non-operated assets to fund additional drilling in the Wolfcamp formation before year’s end. Laredo also has increased its capital expenditures (capex) budget by 25% to grow a crude oil pipeline system.

The latest active rig count for North America from Baker Hughes Inc. shows a flip-flop from last week’s activity as the United States added 10 rigs and Canada dropped seven. In the previous week, Canada added rigs while the United States lost a handful (see Shale Daily,July 31).

Cost reductions and efficiency gains are driving positive results in the Spraberry/Wolfcamp for Pioneer Natural Resources Co., and it is sticking with plans to add rigs in the Northern Midland Basin at a time when some peers are being crushed by low commodity prices. To fund increased drilling, Pioneer raised its spending plans for 2015.

ExxonMobil Corp. has secured more development rights in its most prolific liquids play in the U.S. onshore, the Permian Basin.