‘Game-Changing’ New Research on Prolific Permian Basin Estimates 60 Billion to 70 Billion Barrels Remain, IHS Markit Says

Energy researchers at IHS Markit have completed the first, three-year
phase of a massive Permian Basin research project that models and
interprets the giant basin’s key geologic characteristics to better
estimate its remaining hydrocarbon potential, and initial results
indicate the giant basin still holds an estimated 60 billion to 70
billion barrels of technically recoverable resources.

This Smart News Release features multimedia. View the full release here:
http://www.businesswire.com/news/home/20170925005181/en/

The Permian Basin is Headed for a Second Peak. Source: IHS Markit 2017

To conduct this new analysis, researchers used the IHS Markit historical
well and production database that includes more than 440,000 Permian
Basin wells, and a new proprietary software tool that, for the first
time, enables them to leverage interpreted formation ‘tops’ data to
identify accurate formations for completion intervals on hundreds of
thousands of wells. These results significantly alter the understanding
of the Permian Basin’s resource potential, according to new analysis
from IHS
Markit (Nasdaq: INFO), a world leader in critical information.

“When a geologist looks for new oil reserves, we typically go back to
geologic targets where we know oil was targeted and produced previously,
and in a well file, we call those targets the producing or completion
formations,” said John Roberts, executive director, global subsurface
content operations at IHS Markit. “This producing formation data is a
critical element in assessing and correlating future drilling and
production activity, but since that information is highly competitive,
many operators have historically under-reported that information, which
has created much ambiguity in the data.”

Roberts, along with Prithiraj Chungkham, director of unconventional
resources at IHS Markit, co-authored The Permian Basin Interpreted in
3D: The IHS Markit Permian Basin Unconventionals Kingdom Geology Project.

“Using a new technology we developed, we’ve leveraged our proprietary
IHS Markit interpreted formation-tops data to identify accurate
formations for completion intervals on hundreds of thousands of wells,
and the results change the game for this basin and for geologists’
interpretations,” Roberts said. “It has significantly changed our
understanding of the extent of many formations in the Permian Basin and
the potential of those formations to yield additional hydrocarbons.”

Roberts said the IHS Markit team spent thousands of hours and more than
three years building the technology and using it to ‘rigorously and
methodically’ update the company’s hundreds of thousands of historical
well and production records that cover the Permian Basin’s nearly
100-year history.

“We’re a mix of geologists, private detectives and data scientists who
have new tools that now enable us to re-examine the historical data and
completely reassess the potential of this mature, giant basin in a 3D
model,” Roberts said. “I’m one of more than 60 geologists who have been
recording and correlating formation ‘tops’ data for the Permian Basin
for over 30 years, so this represents a lifetime of work for many of us,
and it’s exciting to finally see the pieces of the puzzle fall into
place. For a scientist, it’s like looking through a more powerful
microscope and suddenly seeing something clearly for the first time—it
is very exciting,” Roberts said.

The Permian Basin, which is a mature hydrocarbon basin located primarily
in west Texas and extending into southeastern New Mexico, has produced
more than 39 billion barrels (cumulative) of oil since it first began
production in the 1920s, reaching a previous production peak in 1973. As
conventional oil production in the play declined steadily during the
following three decades, many in the industry thought the Permian’s best
days were behind it, but unconventional drilling and completion
technology changed the game in the 2000s. This advance made possible the
extraction of unconventional shale resources that were previously
uneconomic to produce, and changed the view of geologists, who, for
decades, had bypassed these less desirable targets in favor of
conventional reservoirs.

With the onset of horizontal drilling and new completion technology
during the past decade, the production decline in the Permian has been
reversed and the basin is on track to soon eclipse its previous peak,
according to IHS Markit.

“The Permian Basin is America’s super basin in terms of its oil and gas
production history, and for operators, it presents a significant variety
of stacked targets that are profitable at today’s oil prices,” Chungkham
said. “In this analysis, we’ve modeled and interpreted more than 70
formations and benches across the Permian Basin and have delivered them
in a work-station-ready 3D format, so Permian operators or new-entrants
can fast-forward their analysis. In particular, the tremendous
improvement in assigned-producing formations adds significant detail and
dramatically changes the views of the basin and our understanding of
where future hydrocarbon potential exists, allowing for faster economic
evaluation of acreage and productive potential. Based on our IHS Markit
analysis, a previously undiscussed opportunity for production may be
from the tight, non-continuous plays produced through short-lateral
wells and low-volume fracking. This offers lower risk, improved upside
potential and ultimately, lower recovery costs, which is good news for
operators,” Chungkham said.

Given the concerns about a potential crude supply shortage in the medium
term, understanding the economic limits of both geography and geology in
the Permian is key for operators and investors, Roberts said.
Independently, such in-depth data interpretation and analysis can be
extremely time consuming and expensive, which has driven demand for this
interpreted, 3D-modeled work-station-ready dataset.

“It enables operators to fast-track their existing interpretation
efforts in the play or to enter new parts of the play,” Roberts said.
“To our knowledge, this is the most ambitious, comprehensive Permian
Basin geologic interpretation analysis and modeling project of its kind
to date, but we’re not done yet. We are already at work on the second
phase of the Permian Basin analysis, which is to further delineate the
various Wolfcamp sub-benches.”

The Permian Basin Interpreted in 3D: The IHS Markit Permian Basin
Unconventionals Kingdom Geology Project contains a 3D geological
model (IHS Kingdom™) of more than 70 geologic formations (from the
Basement to the Upper Permian), built using IHS Markit proprietary
interpreted tops data, which has been used to assign corrected producing
formations for all producing wells. The project includes more than
440,000 updated wells, the interpreted tops, digital logs and allocated
production data. It also contains various analytical data including zone
attributes, GRID files and the results of analysis of 52 plays comprised
of 11 shale (continuous type) and 41 stratigraphic-structural
(non-continuous type). These analyses incorporate PRODFit™ (Producing
Formation from Interpreted Tops), a new well-production database
enhancement that is just now coming online and is being delivered to
customers.

To speak with John Roberts or Prithiraj Chungkham, please contact
Melissa Manning at melissa.manning@ihsmarkit.com.
For more information on The Permian Basin Interpreted in 3D: The IHS
Markit Permian Basin Unconventionals Kingdom Geology Project, please
contact sheana.hamill@ihsmarkit.com.

About IHS Markit (www.ihsmarkit.com)

IHS Markit (Nasdaq: INFO) is a world leader in critical information,
analytics and solutions for the major industries and markets that drive
economies worldwide. The company delivers next-generation information,
analytics and solutions to customers in business, finance and
government, improving their operational efficiency and providing deep
insights that lead to well-informed, confident decisions. IHS Markit has
more than 50,000 key business and government customers, including 85
percent of the Fortune Global 500 and the world’s leading financial
institutions. Headquartered in London, IHS Markit is committed to
sustainable, profitable growth.

IHS Markit is a registered trademark of IHS Markit Ltd and/or its
affiliates. All other company and product names may be trademarks of
their respective owners © 2017 IHS Markit Ltd. All rights reserved.

View source version on businesswire.com: http://www.businesswire.com/news/home/20170925005181/en/

News by QuoteMedia

www.quotemedia.com