The Texas shale discovery in the Midland Basin of the Wolfcamp shale area houses an estimated 20 billion barrels of oil. The oil and 1.6 billion barrels of gas could be worth up to $900 billion. The Permian Basin area discovery is believed to be the largest oil field ever found in the United States, according to a U.S. Geological Survey (USGS) report.
The Midland Basin Wolfcamp shale area oilfield is about three times larger than the 2013 shale oil discovery in the Three Forks and Bakken formations in Montana and the Dakotas, according to geologist Chris Schenk, the Daily Mail reports. Schenk also said the presence of shale oil in the Midland Basin has been readily known for many years but noted it took the U.S. Geological Survey time to assess the Wolfcamp shale area and estimate the production volume.
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While the oil that exists between the layers of Texas shale is believed to be worth approximately $900 billion, oil companies will have to cover the expense of extraction and processing of the oil, cutting into the massive profit margin.
A Forbes report indicates only up to 60 percent of the oil will be recoverable. Geologists consider the recovery of oil from shale an “unconventional” process. Hydraulic fracturing, or fracking, must be used to access and remove the oil from the shale rock.
The Permian Basin area is shaping up to be one of the most energy-rich regions in America. The region encompasses the cities of Midland and Lubbock. The Texas cities are approximately 118 miles apart. The region also includes a series of smaller basins and geological formations in both the Lone Star State and New Mexico.
Rice University at Houston Energy Studies Program Director Ken Medlock said the Wolfcamp shale discovery appears to indicate geologists are witnessing the “birth of a new Permian Basin.”
“We think the potential is there for the future, and it’s not going to be realized overnight,” Ken Medlock continued.
Medlock went on to say energy industry advances such as hydraulic fracturing and horizontal drilling have allowed for the recovery of shale oil in massive volumes. The Rice University energy studies director also noted the Wolfcamp shale area will likely become a “dominant onshore platform for oil production.”
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The Wolfcamp shale area discovery could help the United States become far more energy independent. The U.S. Geological Survey indicated oil and gas industry jobs in Texas could vastly increase in the coming years. Such jobs had reportedly been on the decline as energy prices took a downturn.
“Even in areas that have produced billions of barrels of oil, there is still the potential to find billions more,” Walter Guidroz, coordinator for the USGS Energy Resources Program, said. “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.”
Guidroz also said the Midland Basin and Permian Basin discovery is the largest assessment of unconventional oil the U.S. Geological Survey has ever reported.
“Even in areas that have produced billions of barrels of oil, there is still the potential to find billions more,” Guidroz added.
The Wolfcamp area has been producing oil using conventional vertical wells since the 1980s. Unlike many smaller discoveries of shale, the Midland Basin find is not comprised of multiple interlocking pockets of shale but instead one continuous large pocket. Geologists expect future drilling efforts will ultimately lead to more oil fields being found in the area.
The revival of the Permian Basin in Texas is expected to last at least several decades. Because oil is currently selling for about $46 a barrel, the Wolfcamp discovery might remain untapped until oil prices rise back to a more stable level.
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