The increase in fossil fuel prices was followed by growing rig counts in Texas and New Mexico, with Baker Hughes reporting the Permian added three oil and gas rigs in the last week for a total of 227, but down 56 rigs from 283 a year ago.
That marked an increase from recent months which saw triple-digit differences between the Permian’s rig counts compared with the prior year.
Texas added five rigs in the last week, leading the nation with a total of 214, while New Mexico was second in the U.S. with 70 rigs, holding steady compared with last week.
The resurgence in Permian oil and gas drilling and production meant service companies in the area also increased operations in response to the growth.
Austin, Texas-based White Water Midstream announced an open season for a natural gas storage facility in the Waha region on the Texas side of the Permian, where oil and gas is often shipped from the Delaware Basin to the west along the New Mexico-Texas border for processing and shipment to export and refinery markets such as on the Gulf Coast.
White Water sought storage service agreements from natural gas producers for up to 2 billion cubic feet (Bcf) of capacity, with the facility expected to be operational by July 2022.
The open season began on April 12 and was planned to run through May 21, per a White Water news release and could be extended based on the operator’s discretion.
Located in Pecos County, Texas, the Waha storage facilities are adjacent to the Agua Blanca header system, which can bring natural gas into the area for storage at the interconnecting facilities.
There are six existing caverns and five permitted, which can provide up to 10 Bcf of storage when completed.
Along with the 2 Bcf of added storage, White Water also offered up to 200 billion British thermal units per day (MMBtu/d) of injection and withdrawal capacity at its facilities.
Meanwhile, Kansas-based Terracon, an environmental engineering firm, announced it planned to acquire Midland, Texas-based Sport Environmental Services to provide services to operators in Texas and New Mexico.
Sport offers environmental assessments of oil and gas sites, air permitting, water testing and soil and water remediation operations to operators, per a news release, along with spill prevention and litigation support.
“Sport is a trusted advisor to oil and gas companies in helping them navigate complex environmental regulations,” said Terracon Chief Executive Officer Gayle Packer. “We are excited for their team of experts to join with our offices in Midland and across Texas, further enhancing our environmental services in this area.”
Sport President Deborah Moore said merging with Terracon will increase the company’s position in the prolific Permian Basin as operations grow amid the market’s recovery.
Earlier this year, Terracon bought GET Solutions in a similar acquisition, intending to increase its footprint in the basin many analysts predict will lead oil and gas’ post-COVID-19 regrowth.
Terracon has corporate offices in Midland and Lubbock, Texas and more than 25 locations throughout Texas and New Mexico.
“At Sport, we take pride in being able to mobilize quickly and address our client’s environmental challenges, so they can enjoy safe, profitable, and compliant operations,” Moore said.
“We’re excited to join forces with Terracon to provide the same outstanding service to clients while also drawing on Terracon’s national resources and expertise.”
Analysts expected a continued uptick in operations in the basin, as Rystad Energy predicted oil output expected to grow throughout the second quarter of 2021 with hydraulic fracturing at a 12-month high.
Rystad noted 429 new fracking operations in the Permian in March which February ended with 260 wells, exceeding the numbers needed to maintain present production levels.
The report contended all major oil and gas basin’s in the U.S. were set for growth in the coming months, except for the Bakken in North Dakota and Anadarko in Oklahoma where operators could continue to struggle with declines in base production.
“The Permian was disproportionately hit by the Texas winter crisis in February and activity in the region grew significantly in March, said Artem Abramov, Rystad head of shale research.
“Permian oil production maintenance currently requires about 300 unconventional well completions per month, so the basin is set for production growth already in the second quarter.”
