Major forces around the oil industry indicate the winds of change are blowing. As a whole, the oil industry is preparing to see a rise in oil prices as OPEC has finally set aside its differences long enough to agree to start cutting production levels.
At the same time, Donald Trump is preparing to take on his role as President of the United States, which bodes well for a domestic oil industry that might have a chance to get from under the thumb of the EPA. This perfect storm should create an opportunity for domestic oil concerns to make a major move towards increasing production levels and making the U.S. a little more oil-sufficient.
All eyes are now focusing on the Permian Basin. Located in the West Texas region, this basin has been a stronghold for many of the nations oil producers. According to a recent U.S. Geological Survey, things might even be better than first imagined. The survey indicates that the area still posses as much as another 20 billion barrels of crude oil still available for extraction. To the major oil companies operating in the region, that translates to $900 billion worth of shale.
At companies like Pioneer Natural Resources Co., Apache Corp. and Diamondback Energy Inc., the news is indeed good as each of these concerns control major oil fields in the basin, especially in the Wolfcamp formation.
Based on reports coming out from industry analyst, Pioneer is currently sitting on 800,000 acres in the area that is producing 112,000 barrels of oil a day. Based on the company’s estimate, the amount of oil in the region could be as high as 75 billion barrels. Apache owns 350,000 and recently discovered it had access to 3 billion barrels for its own exploration. At Diamondback, the company is aggressively seven new wells and expecting big results.