top of page
  • Writer's pictureSofia Khan

Midland Executive Oil Conference: Permian Basin operators' new roadmap, "punching back"

I was touched by the warm and friendly environment of Midland, Texas. Flying in from Dallas, I focused on the view outside and below me, seeing hundreds of oil pump jacks lined up along the surface of the earth, and imagining the activity that has gone on in this region for the past century. 

Historic discoveries since the 1920s like the Yates Field, discovered by the predecessors of Marathon Oil Corporation and is still producing oil through over 360 wells, created the rise of the Permian.  In 1927, the spectacular new Yates Field, nicknamed the "Queen of the Pecos" was spewing out more than 192,000 barrels of oil a day, all without pipelines by which to carry the black gold to refineries. (

Paying the Price - We Will Have to Compete

The Executive Oil Conference brought together hundreds of producers, investors, technology providers, analysts and retired professionals who were all interested in the exclusive gathering. The theme of the annual conference set in Midland was "Permian Economics Provide a Counter-Punch: OPEC tried to break the back of America's shale revolution, but now Permian producers are punching back and putting some of OPEC's team on-the-ropes. This fight will determine who can survive and thrive with lower-for-longer oil prices. Finding and development costs have dropped as service companies work hand-in-glove with operators' technical teams. Together they've nearly matched Middle East economics and the resulting supply-side elasticity is redefining E&P market fundamentals worldwide." (Conference brochure)

The Permian Basin in considered a world-class asset by operators who have had a long history in the region. With new drilling technologies, there are still billions of barrels of oil to be produced from the known and newer basins. For example, the USGS recently published information about one such area, the Wolfcamp shale in the Midland Basin:

"The Wolfcamp shale in the Midland Basin portion of Texas' Permian Basin province contains an estimated mean of 20 billion barrels of oil, 16 trillion cubic feet of associated natural gas, and 1.6 billion barrels of natural gas liquids, according to an assessment by the U.S. Geological Survey. This estimate is for continuous (unconventional) oil, and consists of undiscovered, technically recoverable resources. The estimate of continuous oil in the Midland Basin Wolfcamp shale assessment is nearly three times larger than that of the 2013 USGS Bakken-Three Forks resource assessment, making this the largest estimated continuous oil accumulation that USGS has assessed in the United States to date. "The fact that this is the largest assessment of continuous oil we have ever done just goes to show that, even in areas that have produced billions of barrels of oil, there is still the potential to find billions more," said Walter Guidroz, program coordinator for the USGS Energy Resources Program. "Changes in technology and industry practices can have significant effects on what resources are technically recoverable, and that's why we continue to perform resource assessments throughout the United States and the world." " (

Productivity is ramping up even further as we enter the age of the digital oilfield, which will help the operators work on all links of the supply chain in a more seamless manner. The goal has been to sustain the effort and increase production from 2.2 million barrels per day up to 4 million barrels per day by the end of 2020. Hurdles thrown at this rapid growth include a limit in qualified workforce, needed infrastructure, the direction of the oil price itself, and available capital to invest in billion dollar projects.

Since August 2016 the rig count is up 100%, with operators keeping in mind they must remain the lowest cost operator they can be. For a detailed post of my thoughts relating to the event, please link to the article on LinkedIn.

34 views0 comments
bottom of page