Author: Andrew Bleemel, Account Manager, Kinect Energy
You frequently hear the saying, “everything is bigger in Texas.” Why? The saying supposedly originated as a reference to the state’s size versus the other lower 48 states; plus Texas is second in size only to Alaska based on square miles. Texas is so big that you can take 10 of the smallest American states combined and cover only half of its square mile total. Texas also ranks second in population with California being number one.
Since you didn’t log onto an energy website for a geography lesson, the reason this saying rings true when dealing with energy is due the most recent U.S. Geological Survey study on the Wolfcamp shale. This formation has been crowned the largest unconventional crude accumulation ever assessed in the United States that is deemed technically recoverable. It’s nearly three times larger than the Bakken play located in North Dakota.
The Wolfcamp shale formation is located in West Texas (see map) and covers a little piece of ground in the southeast corner of New Mexico. It is located in the Midland Basin within the Permian Basin – historically a very lucrative area of oil and natural gas. The recent estimates indicate the formation could hold as many as 20 billion barrels of crude oil valued at around $1 trillion based on recent crude market prices. In addition to the crude, the formation will reportedly yield a projected 16 trillion cubic feet of natural gas and 1.6 billion barrels of natural gas liquids. The natural gas in this play alone would supply the entire United States demand for over six months as a sole source of supply. All of these resources are said to be trapped under four layers of shale and a mile in thickness in some locations.
The Permian Basin has been gushing crude since the 1920’s. The Wolfcamp area has been a location for vertical drilling since the 1980’s. It has been only recently that the full potential has been realized due to technological advances and techniques in extraction. Horizontal drilling is occurring in the area now, and more than 3,000 wells have been drilled and completed. Exploration companies have rushed to the area, grabbing up land for future wells.
While there still are some factors that may sway the strength and importance of the Wolfcamp play’s future production, the finding of the resource is big not only for the state of Texas but for the entire domestic energy sector. So when you hear the saying, “everything is bigger in Texas,” don’t think only about the land mass or the population. You can reflect upon the state’s contribution to the domestic energy sector and the “big” potential of the Wolfcamp basin.