In 2008 US oil production started at 5.1 million barrels per day (bpd) in early 2008 and is now at 7.5 million bpd. Two shale oil developments driving this renaissance include:
• The Bakken Formation in the Williston Basin beneath North Dakota. North Dakota as a state has increased its oil production from under 150,000 bpd to almost 900,000 bpd making North Dakota the United State’s 2nd largest oil producer behind Texas.
• The Eagle Ford Shale in south Texas which is projected to grow even faster than the Bakken. It will move beyond 1 million bpd by mid-2014.
These two formations come to mind first because their development was enabled by fracking, and they are two of the biggest contributors to the shale revolution. But there is more to the US resurgence in oil production than shale oil.
The Permian Basin beneath west Texas and southeastern New Mexico is somewhat overshadowed by the Bakken and Eagle Ford oil formations but it has potentially more production potential than either of those two shale formations combined. The Permian basin has commercial accumulations of oil and gas at depths ranging from 1,000 feet to more than 25,000 feet. The Permian currently produces some 900,000 bpd of crude, about 12 percent of US oil production. Some analysts expect Permian production to more than double by 2018 to 2 million bpd, an output which hasn’t been seen since the 1970s.
By the time the shale oil revolution started, the Permian had already produced billions of barrels of oil. The area has been pumping crude oil since 1921, and spurred the growth of oil towns like Midland and Odessa. Scientists estimate that trillions of dollars of oil and a half-trillion $ worth of natural gas are yet to be drilled from the Permian Basin.
There are many drilling companies with sizable stakes in the Permian Basin:
- Occidental Petroleum (NYSE: OXY). Occidental Petroleum is the biggest producer of crude oil not only among the more than 1,500 operators in the Permian Basin, but also in the entirety of Texas.
- Chevron (NYSE: CVX)
- Devon Energy (NYSE: DVN)
- Pioneer Natural Resources (NYSE: PXD)
- Concho Resources (NYSE: CXO)
- ConocoPhillips (NYSE: COP)
- Apache (NYSE: APA)