Overall, rig growth in the United States is up 125%, because of the production of 449 new rigs drilled throughout the country. With 43% of these rigs located in the Permian Basin, of which Midland Basin is the largest component, the Permian Basin and is feeling the effects of this increase.
In 1925, the first well was drilled in the Permian Basin. New technologies, along with current oil prices, has caused activity to increase in this area. For instance, according to the Midland Reporter-Telegram, two more rigs were recently added to the Midland Basin, now creating a total of 40 rigs. The Permian Basin now boasts of 342 rigs produced in this area. This brings the total of the Permian Basin rigs to more than half of the rigs drilled in the United States.
In addition, Parley Energy, Inc. has announced that it is negotiating to acquire, at a price of $607 million in cash, some undeveloped acreage along with producing oil and gas properties, located next to their current operations in the Midland Basin and the Southern Delaware Basin.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas.
According to Parley Energy, Inc’s press release, the details of this acquisition are as follows:
With a 55 % increase in sequential growth in Midland Basin, United States oil producers are ecstatic about drilling rigs in the Permian Basin, so much so that there is now a shortage of pipelines needed to carry the oil out. This shortage has kept pressure on Midland prices in comparison to Houston prices, However, this restriction should be relieved by the fourth quarter as new pipelines are built.