Oakville, Ontario – June 23, 2021,
West Texas Permian Basin Crude Oil Overview
According to the U.S. Energy Information Administration (EIA) study, the six basins in Texas represented 90 percent of the growth in O&G production in the United States. A sedimentary basin lying underneath the western part of Texas and the south-eastern part of New Mexico, the Permian Basin Shale covers roughly 75,000 square miles, almost half the size of California. Experts say that it’s cheaper to drill and complete oil wells in the Permian Basin than most other major fields.
Transportation of Crude Oil by Tanker Truck in West Texas
Oil & Gas Operators business depends on oil and gas pipeline and transportation facilities, some of which are owned by others. In addition to the existence of adequate markets, oil and natural gas production depends in large part on the proximity and capacity of pipeline systems, as well as storage, transportation, processing and fractionation facilities, most of which are owned by third parties. The lack of availability or the lack of capacity on these systems and facility it a key driver for the use of tanker trucks.
How to Target the best Oil & Gas Operator for your tanker truck business
Sales 101 we use sales segmentation to help target accounts that we want to market our goods. This is the process of establishing separate marketing strategies to appeal to consumers with different needs, interests, budgets or other attributes. It involves identifying segments of your potential customer base that have the greatest likelihood of purchasing your products or services.
In West Texas we can segment oil & gas operators into 2 types of Oil & Gas Operators the include major and small operators. The grouping is dictated by the amount of production of the Operator. A major Operator produces 100,000’s of barrels of oil, as small Operator produces 100’s of barrels of oil. The following sections provides and overview of the two market segments in West Texas and how the relate to crude hauling business.
Major Oil & Gas Operators Market Segment West Texas
Major Operators in West Texas include companies like Pioneer Resources, Diamondback Energy, Oxy USA and Endeavor Energy Resources. The Operators can have multiple plays in within West Texas. The oil & gas plays can be mature with 1000’s of wells or it can be an emerging production area. The mature area is going to have significant pipeline and processing infrastructure reducing the need for crude oil truck tankers. The emerging plays are more likely in remote areas without established infrastructure, such as western Delaware sub-basin. The lack of infrastructure and remote nature make it a great target for crude oil hauling.
Example of Major Oil & Gas Emerging Play Pioneer Resources
Pioneer Natural Resources Company is a company engaged in hydrocarbon exploration headquartered in Irving, Texas. It operates in the Cline Shale, which is part of the Spraberry Trend of the Permian Basin, where the company is the largest acreage holder. In 2013 Pioneer started to target the Wolfcamp play in West Texas. The Wolfcamp play has helped drive overall crude oil and natural gas production growth in the Permian Basin during the past decade. Drilling and completion operations within the Wolfcamp play have been responsible for much of the crude oil and natural gas production growth in the Permian Basin since 2007. Pioneer Natural Resources Company signed an agreement with Sinochem Petroleum USA LLC, a U.S. subsidiary of the Sinochem Group (“Sinochem”), to sell 40% of Pioneer’s interest in approximately 207,000 net acres leased by the Company. It will take Pioneer years and 100’s of millions of dollars to build pipelines and facilities in the area. This would be a good target market for crude oil tanker business.
Example of small Oil & Gas Operators in a Major West Texas Play
Spraberry Trend covers a large area – around 2,500 square miles. As most often defined, the Spraberry includes portions of Irion, Reagan, Upton, Glasscock, Midland, and Martin Counties. In 2007, the U.S. Department of Energy ranked The Spraberry Trend third in the United States by total proved reserves, and seventh in total production. Estimates have the Spraberry Shale holding up to 10 billion barrels of oil as well as 3 trillion cubic feet of natural gas. Global Hunter estimates the play’s potential recovery resources range from 4.2 to 8.8 billion BOE The table shows small Operators that are in a major play that are great targets for crude oil hauling.
Small Operators in West Texas Spraberry
- Henry Resources LLC
- Legacy Reserves Operating LP
- ON POINT OILFIELD OPERATIONS LLC
- PINON OPERATING, LLC
- Reliance Energy, Inc.
- BIG MOUNTAIN OPERATING LLC
- Canan Mowrey Operating, LLC
- ELEMENT PETROLEUM OP III, LLC
- FDL OPERATING, LLC
- Grenadier Energy Partners, LLC
- Halvey Energy LLC
Conclusion
According to the U.S. Energy Information Administration (EIA) study, the six basins in Texas represented 90 percent of the growth in O&G production in the United States making a great target market of crude hauling industry. A successful strategy to grow your tanker business to use market segmentation to target major and small oil & gas operators in West Texas. Major Operators target emerging plays that do not have pipeline infrastructure and Small Operators target mature plays like the Spraberry.
Source: Patrick Hinds
Recent Comments