Permian Basin Drilling Trends

Spotlight on the Delaware

October 10, 2018

As the U.S. continues to grow its share in the global oil market, the Permian Basin takes the spotlight as America’s biggest contributor. Looking at Permian drilling trends, the basin set a record for production in January 2018 with 2.8 million barrels per day (BPD). Production has continued to climb since then, surging past 3.3 million BPD in July.

The International Energy Agency (IEA) predicts Permian output will double by 2023. Over the next decade, Bloomberg Markets reports the Permian Basin could become the largest oil patch in the world.

Within the U.S., the Permian is by far the busiest and most productive oilfield. According to the Baker Hughes North American Rig Count, the Permian accounted for more than half of rigs drilling for oil in the U.S. with 474 in early July 2018. Meanwhile, the Delaware sub-basin within the Permian continues to bustle with more than 275 rigs drilling for oil in early July.

Such a significant revival of the Permian is owed to major advancements in technology and techniques, including the introduction of horizontal drilling in the basin about 10 years ago. Today, 99 percent of wells being drilled in the Permian are either horizontal or directional rather than vertical.

Drilling time has been cut by more than 50 percent over the past 10 to 15 years. In the Delaware, drilling time for unconventional wells has dropped from an average of 40 to 50 days down to 20 to 25 for horizontal wells. Meanwhile, drilling time for vertical wells has decreased from 30 to 45 days to just 8 to 10 days in formations such as the Spraberry.

DTC Energy drilling supervisors highlight advancements in drill bit technology as being pivotal in improving drilling operations. The experience and lessons gained from drilling each well continues to help operators improve and refine their techniques as well.

With such tremendous growth comes growing pains, however. The pipeline infrastructure currently in place to transport oil and gas from the Permian to refineries along the Gulf Coast are at full capacity and can’t handle the extra surge in production. New pipelines are being built but are not expected to be completed until late 2019 or even 2020.

Due to these limitations, many operators are still drilling wells but choosing to wait on fracking and bringing them online until the new pipelines can meet demand. According to Bloomberg Markets, the number of wells drilled but left uncompleted in the Permian hit a record 3,203 in May, a 90 percent increase from the previous year.

This increasingly large number of uncompleted wells in the Permian offers potential for significant job growth in completions operations in the basin over the next few years.

By Heather Siegel – Denver, CO
© DTC Energy Group, Inc. 2018
[email protected]

Heather Siegel, assistant director of marketing at DTC Energy Group, Inc., is also a meteorologist with a degree from the University of Oklahoma and member of the Society of Petroleum Engineers. Prior to joining DTC Energy Group, she worked as a meteorologist and online journalist for AccuWeather. Some of her previous articles and research include long-range seasonal forecasts for the United States and Europe, as well as outlooks on the effects of hurricanes on oil and gas prices. In her position at DTC Energy Group, Ms. Siegel is continuing her passion for forecasting and trends by writing about the oil and gas industry.

permian drilling trends