AAPG Annual Convention and Exhibition

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An Industry Oversight: Economics Pull Unconventional Technology Back Into Conventional Oil Fields


The Permian Basin is Lower 48's best example of brownfield unconventionals. The first commercial oil well was completed in the Permian Basin in 1921. By the 1970s production had grown to exceed two million barrels of crude a day; but in 2007 production had declined to 680,000 b/d and the industry had written off West Texas as a growth region. However, unconventional drilling and completion technologies have since revitalized the Permian Basin and production now exceeds 900,000 b/d crude. The story is still in its early phase, with annual capital spending set to exceed US$22 billion by 2018. The key to unlocking the ultimate resource prize is not solely technology driven, though. Sustainable success hinges on the industry's willingness and ability to forgo development long enough to fully understand the resource potential. Despite the tremendous upside to unconventional technology, ill-advised application can destroy value both above and below ground. In this presentation we will take a comprehensive look at how operators moved back into the Permian Basin by turning it on its side. The challenge is integrating unconventional techniques into a region where conventional development still provides consistent returns. Complex and heterogeneous Geology, which changes decidedly within plays, further complicates the equation. As the industry grapples with the emergence of stacked formations and multi-producing intervals we will look at some of the top operators’ strategies to maximise the ultimate resource prize.