Forbes Story: A Familiar Name Is The Next Big Thing In The Permian Shale Bonanza

FORT WORTH, TX - DECEMBER 16: A 150-foot derrick towers over traffic along Interstate 35W positioned on a natural gas well site on December 16, 2008 in Fort Worth, Texas. (Photo by Robert Nickelsberg/Getty Images) GETTY IMAGES

In an interview conducted in August 2019, Allen Gilmer, founder and longtime Chairman and CEO of Enverus (formerly DrillingInfo) told me he believes the oil and gas-rich Permian Basin basically amounts to “an inexhaustible resource” for the United States. Gilmer based that assessment on a variety of factors, including the industry’s constant refinement of processes and technological advancements, along with the likelihood of future producing horizons yet to be developed.

That interview was conducted at a time when many experts and analysts were projecting the Permian region was stagnating and in the early stages of an inevitable decline due to falling rig counts and a then-conventional wisdom that all the best prospects had already been drilled up. Gilmer has since retired, but his reasoning proved prescient, as per-well recoveries and overall production in both oil and natural gas have continued to rise to new record levels even as the count of active drilling rigs has dropped to a fraction of those active four years ago, all due to the factors he detailed in that interview.

A promising new producing horizon is gaining attention now, albeit in the form of a formation with a long-familiar name. In early November, Enverus released a report touting the southwestern extent of the Barnett shale as likely to become the next major producing formation in the Midland Basin, the eastern part of the greater Permian region. Knowledgeable readers will be aware of the Barnett as the center of the first major shale natural gas boom centered in north central Texas at the turn of the 21^st century, the germinating point of what we now call the Shale Revolution.

“Sometimes the best place to find new oil is in already-producing areas, which neatly describes what’s happening in the Midland Basin in Texas,” said Emily Head, report author and a senior associate at Enverus Intelligence Research (EIR). “The Barnett formation is buried about 1,000 feet deeper than the Wolfcamp, a prolific oil-producing zone.”