December 2016 SEE Monthly Update
Permian Part II: Hottest Basin, and New Administration
As President-elect Trump makes his administrative selections, a pattern of energy regulation different from the current one is emerging.
This is evident in candidates with business backgrounds, notably Rex Tillerson, the soon-to-be-retired head of ExxonMobil, as the choice for Secretary of State. In picking Scott Pruitt to lead the Environmental Protection Agency (EPA), Trump is signaling a much different direction for this organization. Pruitt is the Attorney General of Oklahoma and a frequent plaintiff against the EPA. And although the Department of Energy (DOE) largely focuses on the US nuclear stockpile and nuclear waste, Trump has nominated former Texas governor Rick Perry to head it. Perry, who once suggested getting rid of the DOE, governed Texas through its wind energy start-up and its oil and gas shale renaissance.
The choices of Pruitt and Perry suggest policies leaning toward deregulation. The choice of Tillerson for State acknowledges running a company in the global, trillion-dollar energy industry, one that fuels transportation and trade worldwide, requires a level of international diplomacy.
Investors of all stripes continue to pour money into West Texas-East New Mexico Permian oil assets, particularly the less-developed western half, the Delaware Basin. The Permian overall produces about two million barrels of oil per day, not quite a fourth of the US total of 9.4 million barrels per day.
Similar to last month’s analysis, the intriguing distinction is that Permian acreage is being evaluated on a three-dimensional rather than a two-dimensional basis: an acre with six to twelve hydrocarbon-rich underlying zones is worth more than an acre with one hydrocarbon-rich underlying zone. The Permian is unique among US plays in presenting so many zones which can add up to four to five thousand feet of stacked pay.
The subscriber section compares many of the public companies operating in the Delaware Basin of the Permian. For more information, log in now or, if you are not already a subscriber, subscribe now.
Copyright 2016, Starks Energy Economics, LLC. This information may not be disclosed, copied or disseminated, in whole or in part, without the prior written permission of Starks Energy Economics, LLC. This communication is based on information which Starks Energy Economics, LLC believes is reliable. However, Starks Energy Economics, LLC does not represent or warrant its accuracy. This communication should not be considered as an offer or solicitation to buy or sell any securities.
- Permian Basin Part I, Inventories, Election, November 2016
- Favorable Winds? Harvesting This Alt Energy Source No Longer Quixotic, October 2016
- Exploration Activity Focuses on Permian Basin, Earthquakes, September 2016
- Petroleum Market Suffers from Inventory Surplus, August 2016
- Many Still Producing Natural Gas in PA-OH Marcellus, Late June/July 2016
- Sand & Proppant Companies Squeeze Through Decline Funnel, June 2016
- Gulf Coast (PADD III) Refining, May 2016
- California Refining, April 2016
- Low Natural Gas Prices Benefit Utilities, March 2016
- Do Solar Energy Companies Shine?, February 2016
- Oil Export/Energy Bill Winners and Losers, January 2016
- Permian Persistence, Part II, December 2015
- Permian Persistence, Part I, November 2015
- Life at the Pumps: Gasoline Demand-Analysis in Two Graphs, October 2015
- Whale Watch: Dividend Hunting at Integrated Internationals, Late September/Early October 2015
- Enduring the Downturn; Bakken Resilience - August 2015
- California Refiners - July 2015
- Bakken Producers, US vs. OPEC vs. Russia, Epstein book - June 2015
- Investor Momentum, Oklahoma Earthquakes, Bakken Rail Transport - May 2015
- Regulatory Changes, Earthquakes, and Proppant Companies - April 2015
- Who is Hurt and Who Benefits from the Oil Price Drop? - March 2015
- Oil Field Services Stress Tested - February 2015
- Haynesville, Louisiana Dry Natural Gas Field - January 2015
- Is the Permian a Bargain Basin Yet? - December 2014
- Starks Energy Economics on Natural Gas - 4th quarter 2014
- Eagle Ford Energy - 3rd quarter 2014
- The Power of the Permian - 2nd quarter 2014
- Ethylene, Star Petrochemical with Renewed Luster - 1st quarter 2014
- Pipeline Drag Reducers - 4th quarter 2013/1st quarter 2014
- Signal vs. Noise: Energy Sources Fueling the United States Now - 3rd quarter 2013
- Natural Gas: Heating, Electricity, Industrial Use, Transport Fuel, Export, or All of the Above? - 2nd quarter 2013
- Besides Better Weather, What Does It Take to Operate an Oil Refinery on the US East Coast? - 1st quarter 2013
- Oil Industry in North Dakota Continues Booming - 4th quarter 2012
- Low First-Half Natural Gas Prices Help Clean the Air - 3rd quarter 2012
- Permian Basin, West Texas and New Mexico - 2nd quarter 2012
- US MidContinent Refineries - 1st quarter 2012
- North Dakota's Bakken Oil Shale Production - 4th quarter 2011
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