Oxy, region’s biggest crude oil producer, to stay active in Permian basin

The Associated Press

The largest crude-oil producer in the Permian basin said it will remain active in the region, a reassurance that was welcomed by local oil industry officials.

Oxy Permian will continue to reinvest funds into its Permian assets and maintain production of those facilities, president and general manager Tom Menges said Sept. 18.

“That's our biggest push, and it's been very successful, but it gets harder each day as oil wells decline and costs go up, so we have to continue to work that,” Menges said.

The announcement was greeted by local industry officials, who have seen other major producers leave the area in recent years.

“It's so refreshing, especially after Marathon leaving, to see someone committed to the Basin like Oxy is,” said independent oil producer Jim Henry.

Marathon Oil said this summer it would slash its Midland staff and move management of its Permian basin interests to Houston.

Henry, president of Midland-based Henry Petroleum Corp., said it was encouraging to see that Oxy is doing well “and making a good return on their investments.”

Menges said Oxy plans to spend $100 million to $200 million next year to drill 200 to 250 new wells and to maintain steady production levels from the assets it acquired in the 2000 purchase of Altura Energy. The company will further develop proven reserves of 1 billion barrels of oil, he told about 130 members of the Permian basin Petroleum Association. In the Permian basin, Oxy operates so-called legacy assets — large oil fields discovered many years ago that still have reserve capacity.

“Some would say they are old and tired, but they have tremendous oil in place,” Billy Bledsoe, an Oxy reservoir management team leader in Midland, told the Odessa American.

Menges told the petroleum association that Oxy plans to start at least one major project using so-called enhanced recovery — such as flooding a well with carbon dioxide to force out oil. Possible locations include near Hobbs, N.M., in western Andrews County or near Levelland, he said.