The Permian Is the Place to Be
In the Permian Basin, oil has been king since 1921. The Permian area has produced 30 billion barrels of oil in its lifetime. Now, the Permian churns out about 2 million barrels of oil a day, equal to almost 25% of the crude oil in the U.S. That’s twice as much as the Bakken and Eagle Ford shale fields combined. (Apache’s Alpine High is in the Permian.) The Permian is attractive for a simple reason: It makes money. Drilling and operating wells there is profitable, even at $50 a barrel. Drilling a well requires a lot of upfront cash. Obviously, keeping the costs as low as possible is critical to making wells profitable. Permian wells are among the best at returning cash. And they return it fast. The market likes that, which is good for us as investors. In 2017, all but four zones make money at $50 per barrel. More than half make money at $40 per barrel. Let me show you why this place is so profitable when Russia, Iran, and Western Europe aren’t...
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