The Permian Basin has been the driving force of the US shale revolution, propelling the nation to becoming the single largest oil producer globally. However, prognosis of this oil powerhouse hitting the "Hubbert’s Peak" is arising concerns amongst experts, after which diminishing returns can be expected. Acquisitions of Pioneer and Crownquest by ExxonMobil and Oxy respectively showcase a clamor to cement strategic position in the proven ‘Tier 1’ acreage – but what of companies who can’t afford to pay such premiums?
The Dilemma: Tier 1 Acreage Saturation
The theory of dwindling premier acreage is driving a shift in focus for many operators towards Tier 2 and Tier 3. A significant percentage of wells drilled in 2023 were child wells, producing at considerably lower rates than their parents. Moreover, the number of 'drilled but uncompleted wells' (DUCs) fell to post-shale boom lows. With the depletion of prime acreage, and dwindling DUC inventory companies are left wondering: Where next for oil in the Permian? The answer points to Tier 2 and 3.
Speaking of Quality: The Tier 2 and 3 Prospects
The Permian Basin, like other major shale fields, is divided into Tier 1, 2, and 3 production locations. As Tier 1 locations exhaust, operators are compelled to explore new territories. According to a 2019 Deloitte study, the drop-off in quality from Tier 1 to Tier 2 and beyond can be managed with appropriate technical understanding and optimized completions, but what increases is the heterogeneity and uncertainty in returns. The secret to success addressing these concerns, as ever, lies in understanding the rocks.
Geoscience: The Unsung Hero
Geoscience provides key insights for well planning, drilling, and production by maximizing hydrocarbon production and increasing safety. The role of geoscience becomes critical when exploring Tier 2 and 3 assets, where the heterogeneity of rock quality increases and geological hazards escalate. High-resolution subsurface models are critical for designing efficient well and completion plans in these areas.
Subsurface Data: A Critical Resource
The correct assessment of subsurface areas depends on geoscience expertise and data. Although data is plentiful across the Permian basin thanks to roughly 100 years of continuous operations, verifying thousands of logs, formation tops, and well positions manually is time-intensive, and costs can spiral.
Curate: Your Partner in Geoscience
At Ikon Science, we provide robust solutions to these issues via our automated and integrated data management platform, Curate. This easy-to-implement solution provides instant access to quality, vetted subsurface data, regardless of source or format. Our cost-effective, scalable licensing model and the intuitive web-based interface allow operators to develop data confidence and seamless data flow. Curate is here to make geoscientists the hero in Permian Basin Exploration. We’re here to make your subsurface data. Managed.
Chris Hanton is 15-year member of the energy industry, a career which has incorporated all facets of data, from acquisition, management and utilization. As Director of Digital Transformation at Ikon Science, Chris uses his experience to assist the energy industry make strides in productivity and impact by empowering business units through digital technology. Chris comes from a geoscience background with masters in in Geology and Integrated Petroleum Geoscience from the University of Liverpool and University of Aberdeen respectively.
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