A new report by the US Geological Survey (USGS) states that the Delaware Basin’s Wolfcamp shale and Bone Springs Formation hold the largest potential oil and gas resources ever discovered. The regions may hold as much as 46.3 billion barrels of oil, 281 trillion cubic feet of gas and 20 billion barrels of NGL.
This is a dramatically larger assessment than the one the USGS performed on the Wolfcamp in 2016. At the time, the shale play held an estimated 20 billion barrels of oil, 16 trillion cubic feet of associated natural gas and 1.6 billion barrels of NGL. The Bone Springs alone might hold roughly seven times the amount of oil as North Dakota’s Bakken shale.
In a prepared statement, US Secretary of the Interior Ryan Zinke said, “Before this assessment came down, I was bullish on oil and gas production in the United States. Now, I know for a fact that American energy dominance is within our grasp as a nation.”
When that dominance will truly take hold remains anyone’s guess, particularly as oil prices have dropped into the low $50/bbl range from recent highs in the $70s/bbl. Still, global oil market uncertainty seems to be driving production of oil and gas from West Texas, and the assessment shows that there are plenty more recoverable hydrocarbons to find in the region.
While the increased reserve picture is great news for area producers, concurrent news of Texas RRC pending policy changes in the area provides a complicating footnote. In the face of double-digit production growth in the area, regulators are proposing new seismic review policies for disposal wells which could constrain new capacity growth in certain seismically stressed areas. It remains to be seen how these new policies will shake-out for Delaware producers.
EnergyMakers Advisory Group will keep you posted on interesting developments in West Texas oil and gas production as they arise.