Permian Basin becoming 35 % more productive
Call it Permian, version 3.0.Other companies are reporting similar gains in productivity. The US oil and gas business has been increasing efficiency at a dramatic pace ever since OPEC made the mistake of trying to kill it with predatory pricing.
That’s how Tim Dove, who leads Pioneer Natural Resources Co., refers to new well designs his company says are now pumping 35 percent more oil than their predecessors. And Pioneer’s not alone: Rivals are also boasting of huge improvements resulting from new-look technology, indicating that the biggest U.S. oilfield may grow production more quickly than anticipated.
The Permian Basin’s stacked layers of oil-laden rock under the west Texas and New Mexico dirt are already so productive they’ve stymied efforts by the Organization of Petroleum Exporting Countries to reduce supply, and brought the U.S. closer to energy independence. The field produces 3.2 million barrels a day, more than OPEC member Kuwait.
For some, more high-tech wells could mean more capital spending, the opposite of what many investors want right now. But that’s not concerning Dove, Pioneer’s chief executive officer.
“The results have been stellar,” Dove said on a first-quarter conference call Thursday, when he dubbed the new wells as "3.0 plus” models. “The more we drill, the better we’re going to do.”