Permian Basin Secret: How Efficiency Plays a Role in Today’s Energy Marketplace

With the price of oil in the mid-$40 range this week and plummeting to a low of sub-$27 earlier this year, energy companies are tightening the purse strings on new exploration and extraction.

They’re focusing the most attention on the high-producing and low-cost rigs of the Permian Basin — where rock formations tend to be thinner and require less drilling and upkeep.

In looking at the latest rotary rig count data by Houston-based oilfield services company Baker Hughes, the Permian Basin had 142 rigs, by far the state and nation’s most-active basin. (There are 178 active rigs in Texas and 408 in the United States, according to the data.)

It’s no coincidence, then, that the average break-even cost per barrel of oil in Bone Spring, Spraberry and Wolfcamp formations — all in the Permian Basin — are lower than those of the nearby Eagle Ford.