West Texas oil production surge expected

Fuel Fix:
Two plays in the Permian Basin could see a surge in production and together pump 38 percent of the West Texas region’s oil by 2018, according to report released this week by energy research firm Wood Mackenzie.

Exploration and production giants such as Apache Corp., ConocoPhillips, and Chevron are positioned to lead an investment boost in the oil fields, and in five years, capital expenditures could jump 57 percent to $22 billion in the two Permian Basin plays. Together, the Bone Spring and the Wolfcamp plays could pump 1 million barrels of oil per day by 2018, Wood Mackenzie reports.

“The Permian Basin is a very mature region, but now horizontal drilling is allowing operators to go back there and unlock massive resources,” said Scott Pearson, an upstream analyst at Wood Mackenzie. “There’s a lot of hype about big numbers.”

Oil boom: US energy rigs grow to 2013 high on oil price surge

To put Wood Mackenzie’s forecast of $22 billion capital expenditures in context, Pearson said, the firm also is predicting that oil and gas players will invest $28 billion throughthe entire Eagle Ford in South Texas in 2013. That would be a quarter of oil capital expenditures in the Lower 48.

One factor driving of the investment surge: Horizontal wells are a lot more expensive to drill than conventional wells, running up $6 million to $10 million per well compared to $1 million to $2 million for a vertical well, Pearson said.
... 
The Cline formation in West Texas could also be even bigger than these.  This West Texas oil play has more potential than the Eagle Ford which has been a real driver of increased production in Texas and the US.

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