Permian Basin Companies

[dan_s]

The Midland-WTI Differential, which is the price difference between oil in the Permian Basin and the U.S. domestic benchmark price, for crude delivered this month is $12.80 per barrel.

This Big Oil Company Found a Way Around Shale's Biggest Obstacle Today by The Motley Fool .
Read comments from any producer, pipeline, or oil services company these days and you will come across the same thing: North American production is overwhelming infrastructure capabilities. It is allowing some companies to generate outsized profits, while others have warned that this could drastically impact the bottom line over the next several months. One company that seems to be unperturbed by these issues is oil giant Chevron (NYSE:CVX). Even though the company is one of the top producers in the Permian Basin and is growing its shale production by leaps and bounds there, management seems to think that pipeline capacity won't be an issue. It's getting harder and harder to overstate the size and production potential in the Permian Basin every day. Pure-play shale producer Pioneer Natural Resources estimates that the Permian is about the same size as Saudi Arabia's supergiant Ghawar field, and that breakeven prices across the basin are less than $30 per barrel. With stats like that, companies with sizable acreage there could make a killing. That is all well and good, but it won't matter if companies can't get the product to market. Today, that is the largest challenge to Permian players: finding enough capacity to move product out of the basin. Capacity to move crude oil to the Gulf Coast for export is practically worth its weight in gold these days, and companies that don't have adequate takeaway capacity are realizing much lower prices.

Read this: https://www.fool.com/investing/2018/09/ ... s-big.aspx

Conclusion: The important takeaway here is that not all shale producers in North America are equal, and it should be an important factor for investors when looking at this industry. Those like Chevron (and EOG, PXD and PE) that can anticipate issues like pipeline capacity and allocate capital accordingly are going to be the ones that are successful, while others that think the solution to all their problems is to drill for more oil and gas will be the ones that miss out on millions in revenue and generate marginal returns. As an investor, take your time to discern which companies are the ones that are putting some thought to their development plans because it will play a large part in your portfolio gains.
MY TAKE: Don't forget that midstream companies are working hard to solve the takeaway capacity issue in West Texas. It will be resolved within 12 months.

[par_putt]

Chevron (NYSE:CVX) is also working in alberta They will be using sand silos for storage to give them just in time sand to complete their lateral wells. There is a smaller window for completions in canada.

[dan_s]

They keep working in Canada until "Spring Break-Up" in May & June. This also goes for North Dakota.

[ddlopata084]

The basin differential is also a good income opportunity for Midstreams serving the Permian who have a marketing arm and some unreserved capacity. ETP banked $100M EBITDA last Q on basin differentials, most of it I’m guessing in the Permian. That should have continued into Q3, and into at least a portion of Q4. They give up spare capacity to reservation on their Permian Express pipes in Q4.