Ooops! With Best Parts Of Permian Already Fracked, What's Left Is Producing More Gas, Far Less Oil

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As oil prices plummet, oil bankruptcies mount, and investors shun the shale industry, America’s top oil field — the Permian shale that straddles Texas and New Mexico — faces many new challenges that make profits appear more elusive than ever for the financially failing shale oil industry. Many of those problems can be traced to two issues for the Permian Basin: The quality of its oil and the sheer volume of natural gas coming from its oil wells.

The latter issue comes as natural gas fetches record low prices in both U.S. and global markets. Prices for natural gas in Texas are often negative — meaning oil producers have to pay someone to take their natural gas, or, without any infrastructure to capture and process it, they burn (flare) or vent (directly release) the gas. As DeSmog has detailed, much of the best oil-producing shale in the Permian already has been drilled and fracked over the past decade. And so operators have moved on to drill in less productive areas, one of which is the Delaware sub-basin of the Permian. Taking a close look at the Delaware Basin highlights many of the current challenges facing Permian oil producers.
Delaware Basin Producing More Gas Along With the Oil

The Delaware Basin is where most of the new oil production is coming out of the Permian. As a Bloomberg Wire story reported in December, “in recent years investments have shifted to the Delaware, where output is much gassier than in the historic Midland portion of the Permian.” The last thing a Permian oil producer wants is to have natural gas coming out of the ground with the oil because, as Bloomberg notes, this persistent “nuisance” is “undercutting profits for explorers.” That's a generous assessment because many explorers have no profits to undercut, only losses to grow. Shale wells become “gassier,” or produce more natural gas, as they age and oil production falls. And this problem hasn't improved for wells in the Delaware that are drilled closer together, compounding the Permian’s gas problem.

With natural gas prices often going negative in Texas, producers are turning to flaring and venting more of the gas, which is mostly the powerful greenhouse gas methane. Public awareness has been rising for this issue, due in part to the work of people like Earthworks' Sharon Wilson who uses a special camera that can “see” invisible methane leaks from the oil and gas supply chain. As a result, public pressure has been growing on the industry to deal with its methane problem. Fracking CEOs have been publicly noting that this issue is going to interfere with their “social license,” or ongoing societal acceptance, to keep drilling and fracking. But if the U.S. shale industry can’t flare or vent its excess methane, those companies will likely be forced to shut down oil production due to cost.

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EDIT

https://www.desmogblog.com/2020/02/21/challenges-permian-shale-oil-condensate-gas

[rampartc]

1. they flare off the gas

it is a wasteful industry that needs to be regulated far more than now.

[Mike 03]

2. Incredible:

Prices for natural gas in Texas are often negative — meaning oil producers have to pay someone to take their natural gas, or, without any infrastructure to capture and process it, they burn (flare) or vent (directly release) the gas.