A new assessment of one portion of the oil and gas field known as the Wolfcamp formation, in West Texas’s Permian Basin, has been found to hold 20 billion barrels of oil — almost three times larger than North Dakota’s Bakken shale oil field. According to the U.S. Geological Survey’s (USGS) latest estimate, Wolfcamp is the single largest U.S. unconventional crude oil discovery ever assessed.
Even with current, relatively low oil prices, Wolfcamp’s reserves are worth almost $900 billion.
Huge, Growing Reserves
Bloomberg’s Joe Carroll reports, the estimate shows Pioneer Natural Resources CEO Scott Sheffield’s estimate the Permian’s shale could hold as much as 75 billion barrels of oil is credible. If true, this one play would make the Permian Basin second only to Saudi Arabia’s Ghawar field.
Pioneer, who has been developing and producing in Wolfcamp, has increased its production targets regularly throughout the year as wells in Wolfcamp consistently produced more oil than the company’s engineers and geologists had forecast.
Based on the rate of production of wells in the formation, producers can make a profit on oil from the Permian basin even at present low oil prices.
“The fact that this is the largest assessment of continuous oil we have ever done just goes to show that, even in areas that have produced billions of barrels of oil, there is still the potential to find billions more,” Walter Guidroz, coordinator for the USGS’s energy resources program, said in the statement reported by Bloomberg News.
Oil companies have been producing oil from the Permian Basin since the 1920s. However, until new techniques in hydraulic fracturing, or fracking, and horizontal drilling became widespread in the last decade, the diffuse pockets of oil trapped within the multiple layers of the Permian Basin’s shale rock was largely inaccessible.
Company after company operating in the Wolfcamp formation have increased their estimated oil reserves in the last year as flow rates and production have consistently outperformed expectations. For instance, Bloomberg reports, ConocoPhillips increased its estimate for its Wolfcamp holdings from 1 billion barrels of oil in 2015, to 1.8 billion barrels, on November 10, and on November 9, Concho Resources told investors two of its recently drilled wells in Wolfcamp were producing an average of 2,000 barrels a day per day.
In addition to oil, in its November 15, statement, the USGS reported Wolfcamp’s shale basin also holds 16 trillion cubic feet of natural gas and 1.6 billion barrels of gas liquids.
H. Sterling Burnett, Ph.D., ([email protected]) is the managing editor of Environment & Climate News.