Watch Out Marcellus/Utica, Here Comes Gas from the Permian

The Wall Street Journal has an interesting article appearing in today’s edition that points out the Permian Basin shale play (in West Texas) may, in a few years, “rival new gas output” from the mighty Marcellus Shale. Really? Where did that come from?! It makes a great deal of sense. The Permian is an oil-focused play. Drillers can’t stand enough rigs in the Permian fast enough. Drilling for oil in the Permian at $50/barrel is profitable–for everyone. So where does natural gas come in? Ever read about “associated gas” here on MDN? We’ve talked about it a fair deal over the years. Whenever you drill for one hydrocarbon–like oil–you get other hydrocarbons coming out of the borehole too. Like natural gas, and gas liquids (propane, ethane, butane, etc.). The converse is also true. Drillers targeting natural gas sometimes get oil and NGLs. In the Permian, an “oil play,” there is a LOT of associated gas coming out of the holes drilled, along with the oil. And the massive drilling program under way there means overall output from the Permian may, at some point, rival (or come close to) the output in the Marcellus. What does that mean for Marcellus drillers and landowners?…

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