According to a recent estimate by the US Geological Survey (USGS), the Wolfcamp shale in the Permian Basin holds 20 billion barrels of unconventional, technically recoverable oil, a $900 billion value at current prices. This could be the largest oil deposit ever found in the United States.
Located in the Midland Basin portion of Texas’ Permian Basin province, the Wolfcamp shale is also thought to contain 16 trillion cubic feet of associated natural gas and 1.6 billion barrels of natural gas liquids.
The estimate triples the assessment of the Bakken-Three Forks area, which has been at the top of the list since 2013. This should come as no surprise in the golden age of unconventional oil. As extraction methods keep developing, we will continue to find as yet untapped deposits all over North America.
For Walter Guidroz, who coordinates the USGS Energy Resources Program, the finding indicates that massive deposits may continue to be found even in areas that have already yielded billions of barrels of crude. By now, it is clear that the oil is there, all we need is to use the right technology. “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 has commented.
Conventional oil (using traditional wells) has been produced in the Wolfcamp shale since the 1980s. The era of horizontal drilling and fracking has brought over 3,000 horizontal wells to the area. Wolfcamp also covers part of the Delaware Basin portion of the Permian Basin, but the USGS has only assessed the Texas portion.
While this type of USGS assessments do not evaluate whether production might be profitable, with the rapid development of new extraction methods and more efficient versions of the current technology, it becomes clear that the Wolfcamp shale is going to become an important asset for America.
As OPEC seems to have no other choice but to cut production and prevent a further price plunge, unconventional oil production is poised to benefit from a higher price environment.
In the case of the Wolfcamp shale, the technology needed to tap into billions of barrels of crude is already available. The USGS assessment represents another step forward on the road to America´s complete energy independence, and it is a clear sign that the Permian Basin still has decades of bonanza ahead.
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