The collapse of oil prices has ground shale drilling to a halt, but the one region where drilling is still active, and even increasing, is in West Texas. The Permian Basin is one of the last profitable areas to still drill with sub-$50 oil, and as other regions fall by the wayside, an increasing portion of drilling activity and spare investment dollars are flowing into the Permian. The rebound in the rig count in the U.S. is largely concentrated in the Permian. The West Texas shale basin has captured two-thirds of the 90 oil rigs that have been added since hitting a nadir in May. On August 25, Blackstone Group announced its decision to inject $1 billion into Permian assets in a partnership with a Fort Worth-based affiliate of Jetta Operating Co. The companies are essentially creating a pure play company to target the Delaware Basin in the Permian, the latest vote of confidence for a region that is undergoing a resurgence. The move comes after a handful of other billion-dollar deals targeting the Permian in just the past few weeks. SM Energy announced in early August that it would pay just shy of $1 billion to add nearly 25,000 acres in the Permian, doubling its holdings there. A week later Parsley Energy said it would acquire more than 11,000 acres for $400 million. Also, Concho Resources announced its decision to pay $1.6 billion for 40,000 acres in the Midland Basin in the Permian. Parsley and Concho both issued new equity to pay for the acquisitions and investors appeared enthusiastic about the move – The Wall Street Journal reported that Parsley received orders for more than four times the number of shares it was issuing for the Permian acquisitions. Discussing his company’s plans for the region, Concho’s CEO Tim Leach said that the Permian has some of “the hottest zip codes in the industry.” As Bloomberg noted in an Aug. 8 article, QEP Resources paid $60,000 an acre to an undisclosed owner in June. In late August, PDC Energy paid an investment firm $1.5 billion for Permian assets. In a July research note to clients, Eli Kantor of Iberia Capital Partners LLC said that deals in the Permian are at an all-time high. The rash of deals exemplify the latest trend as the oil markets slowly move towards balance and oil prices continue to languish below $50 per barrel. Other shale regions such as the Bakken, the Eagle Ford and the Niobrara—not to mention major shale gas plays such as the Marcellus—have fallen out of favor with both the oil industry and Wall Street. Pioneer Natural Resources, for example, announced its decision in June to allocate 90 percent of its capex to the Permian, or about $1.8 billion. Other firms have also announced their decisions to step up drilling in the Permian this year, including companies like Apache Corp., Cimarex Energy and Occidental Petroleum. Some see the flood of cash into the Permian as a sign that the oil market is rebounding strongly. “It looks like we’ve come out of the trough portion of the cycle for the oil-and-gas sector and are on the road to recovery, though the road will likely be winding and it will take some time to get there,” Angelo Acconcia, who oversees Blackstone’s oil and gas investing, told The Wall Street Journal. But the flood of investment is also jacking up land prices in West Texas as more and more companies compete for prime acreage. “Some are starting to feel like this is a bubble,” said Charles Robertson II, an analyst at Cowen Group Inc., told the WSJ. Oil analyst Art Berman goes further than that, arguing that the Permian is merely the “best of the bad lot.” Many places in the Permian still lose money with oil prices below $50 per barrel, he says, but because so much capital is hunting for yield in a low-yield environment, there is a lot of available money from Wall Street that is flowing out of other places like the Eagle Ford and the Bakken and into the Permian. But just because money is pouring into the Permian, it does mean that things will end well for Permian drillers. Berman calls it a “race to the bottom,” as huge volumes of cash inflate a specific shale basin for a period of time, but the resulting production pushes oil prices back down. Companies post losses and some even go bankrupt. Investors grow wary of that particular geographic area and move on to another, repeating the process. It is unclear if that is what will happen in the Permian, but for now, things appear to be back on the upswing as shale drillers increasingly concentrate their efforts in West Texas. Nick Cunningham is a Vermont-based writer on energy and environmental issues.
Cook J.,PDC Energy
Society of Petroleum Engineers - Canadian Unconventional Resources Conference 2011, CURC 2011 | Year: 2011
This paper discusses a modeling technique that can be used to predict the gas production from Marcellus Shale wells. The fundamental concept is to model the relationship between pressure and production over time using inflow performance relationships and volumetric calculations. The model can be adjusted to fit the production values and then used to predict production on that well or on offsetting wells based on the pressures that are expected. The introduction of this paper provides a general description of the characteristics and production volumes that are typical of horizontal Marcellus wells. The theory separates the reservoir into two systems; the stimulated reservoir and the matrix reservoir. From these systems inflow performance relationships, decline curves, and volumetric calculations are used to build the model. Over time, the inflow performance curves will change. With this model, an inflow performance curve can be generated at any point in the life of the well. By creating a model for a well, a prediction can be made of the well's production if conditions change. This could be extremely helpful in modeling pipeline and compression systems or evaluating wells under changing conditions. It can also be used to estimate potential production from curtailed wells. Over time, the model may also be used to indicate if damage or enhancements have occurred or if chemical, mechanical or stimulation treatments were effective. The technique could easily be applied to other similarly designed wells. This could include other shale wells, CBM wells or wells in naturally fractured reservoirs. This paper presents a theory that is a "first run" concept, based on previous work, theories, and observations. The technique presented can be expanded and refined by future researchers. Copyright 2011, Society of Petroleum Engineers.
Shen J.,University of Colorado at Boulder |
Shen J.,Henan University of Technology |
Raj R.,University of Colorado at Boulder |
Raj R.,PDC Energy
Journal of Power Sources | Year: 2011
We show that anodes made by depositing thin films of polymer-derived silicon oxycarbide (SiCO) on copper have properties that are comparable to, or better than that of powder-based SiCO anodes. The great advantage of the thin film architecture is its simplicity, both in manufacturing and in application. The films are produced by spraying a film of the liquid polymer-precursor on copper, and then converting it into SiCO by heating at ∼1000 °C; at this point they are ready for constructing electrochemical cells. They show a capacity of ∼1000 mA h g-1, 100% coulombic efficiency, good capacity at very high C-rates, and minimal fading at ∼60 cycles. However, if the films are thick they delaminate due to the volume change as lithium is cycled in and out. The transition from thin-film to thick-film behavior occurs when the SiCO films are approximately 1 μm thick. An analytical method for estimating this transition is presented. © 2011 Elsevier B.V. All rights reserved.
Ryu H.-Y.,University of Colorado at Boulder |
Ryu H.-Y.,Hyundai Motor Company |
Wang Q.,National Renewable Energy Laboratory |
Raj R.,University of Colorado at Boulder |
Raj R.,PDC Energy
Journal of the American Ceramic Society | Year: 2010
We report the semiconductor behavior of polymer-derived ceramics at high temperatures extending up to 1300°C, far above that of any known material. The conductivity depends strongly on the N/O molar ratio, reaching its highest value when the ratio is approximately unity. The temperature dependence of the conductivity for these specimens, σ, shows good agreement with the Mott's variable range hopping (VRH) mechanism for three-dimensional conduction in amorphous materials as described by. The comparison yields the following range of values for the density of states, N(E)=4.9 × 10 17-5.9 × 10 18 (eV·cm 3) -1, hopping energy, W=0.017-0.047 eV, and hopping distance, R=13.4-21.8 nm. The charge carrier mobilities predicted by the VRH model are in excellent agreement with the values measured in the Hall experiment. The long hopping distances are an unusual feature of this ceramic, suggesting long-range wave functions that may arise from clusters of SiCNO atoms that can exist in the form of a nanodomain network. Specimens that are either rich in oxygen (at the expense of nitrogen) or rich in nitrogen, have conductivities that are four to eight orders of magnitude lower than the ∼equimolar compositions. One oxygen-rich specimen shows band-gap controlled semiconductivity with an activation energy of 1.1 eV. Taken together, these results suggest that the electronic properties of the SiCNO ceramics are controlled by complex interactions between C and other atoms (Si, N, and O). These results are at variance with the simple picture where "free carbon" is assumed to determine the electronic behavior. © 2010 The American Ceramic Society.
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Photography courtesy of David Tejada Photography, 2016