It may surprise you that the Permian Basin is responsible for a significant portion of the world’s oil reserves. As the United States’ most significant oil producing area, the Permian Basin still has a substantial amount of oil and gas reserves in the area. The basin is wide and 300 miles across, making it one of the largest oil and gas producing regions in the country. About 15% of the nation’s gas output and 43.6% of the nation’s crude oil production come from the Permian Basin as of April 2022. This article provides a comprehensive analysis of the Permian Basin, including data on oil and gas production, the historical background of the basin, and other interesting facts.

About Permian Basin

The Permian Basin sprawls across 86,000 square miles in the southwestern United States. With a daily production rate of 4.2 million barrels of crude oil in 2019, it is the highest producing oil field in the United States. Extending from western Texas to southeast New Mexico and reaching from Texas’s panhandle in the north to the Rio Grande River in the south, it encompasses West Central Texas. It reaches east to the southeastern parts of New Mexico. The Permian Basin comprises many smaller basins. Of these, the Midland Basin is the largest, the Delaware Basin is the next largest, the Central Basin Platform, and the Marfa Basin is the smallest part of the Permian Basin. However, from a surface vantage point, the Permian Basin is a site of beauty, where Texas cattle ranches meet the wide open prairies, blanketed with beautiful oil rigs!

The Permian Basin, formed during the Permian period, is a rich sedimentary basin known for its extensive hydrocarbon reserves located in layered rock formations within the southwestern United States. It has a complex structure, including the Midland and Delaware sub-basins, which over millions of years, have experienced sedimentation, tectonic shifts, and organic matter transformation into fossil fuels. Certain formations within the basin, such as the Wolfcamp XY and Brushy Canyon Formation, reach maximum thicknesses that are significant in the region. This particular basin stretches from eastern New Mexico to the Rio Grande Valley in the south and up to Lubbock in the north, covering 75,000 square miles, and ranking as one of North America’s most significant basins.

Where the historic West meets the new era, the Permian Basin has a compelling and natural beauty in the middle of modern civilization. It’s an area that seamlessly blends ruggedness with West Texas elegance. Beneath its vast blue skies live industrious, hardworking, and friendly people. The Permian Basin attracts people who seek to shape their destiny. The basin is also renowned for containing some of the world's thickest deposits of sedimentary rocks, which contribute to its geological significance.

Odessa and Midland meld urban and rural lifestyles. Dreamers around the world have come to West Texas for freedom, adventures, and the pursuit of oil riches for decades. Odessa, one of the fastest-growing small communities in the United States, and Midland, home to multinational firms and the legacy of President George H. W. Bush, offers opportunities unparalleled by many other places.

Technology changed the Permian Basin landscape in the early 21st century, uncovering enormous oil reserves. It emerged as the world’s most prodigious oil reservoir, set to power the United States and global economies for years. This discovery sparked a surge in revenue generation, creating jobs across a wide range of sectors, such as commerce, healthcare, education, construction, technology, transportation, and the public sector, signifying not just an oil boom but a more prominent economic surge. The basin's formation during the Permian period resulted in the rapid deposition of Permian aged rocks, which are a defining feature of its stratigraphy and resource potential.

Geology of the Permian Basin

Stretching across western Texas and southeastern New Mexico, the Permian Basin covers an impressive 86,000 square miles, making it one of the world’s most expansive and geologically diverse oil and gas producing regions. The basin’s complex geology is the result of hundreds of millions of years of tectonic shifts, sedimentation, and erosion, creating a patchwork of rock layers that are rich in hydrocarbons.

At the heart of the Permian Basin’s geological structure are three distinct regions: the Midland Basin to the east, the Delaware Basin to the west, and the Central Basin Platform sandwiched between them. Each of these sub-basins has its own unique geological story. The Midland Basin, located in western Texas, is characterized by thick accumulations of sedimentary rocks, including sandstones and shales, which have proven to be prolific sources of oil and natural gas. The Delaware Basin, stretching into southeastern New Mexico, is deeper and contains multiple layers of limestones, dolomites, and shales, making it a hotspot for both oil and gas production. The Central Basin Platform, uplifted by ancient tectonic forces, acts as a structural high between the Midland and Delaware Basins and is known for its oil-rich San Andres and Clear Fork formations.

The Permian Basin’s rich depositional history is evident in its major geological formations. The Wolfcamp Shale, found in both the Midland and Delaware Basins, is a thick, organic-rich layer that has become a primary target for modern oil and gas extraction. The Bone Spring Formation in the Delaware Basin is another key reservoir, composed of several layers of sandstones, shales, and limestones, each contributing to the basin’s vast hydrocarbon potential. In the Midland Basin, the Spraberry Formation stands out as a major oil-bearing sandstone, deposited over millions of years and now a cornerstone of the region’s oil production.

This region’s geological evolution was shaped by events such as the formation of the Hovey Channel, which once allowed ancient seas to flood the area, depositing thick layers of sediment. Tectonic activity, including the uplift of the Central Basin Platform and the development of the Ouachita-Marathon fold belt, further sculpted the landscape, creating the structural traps and reservoirs that now hold vast quantities of oil and natural gas.

Thanks to this unique geology, the Permian Basin has produced over 30 billion barrels of oil and more than 100 trillion cubic feet of natural gas to date. According to a recent geological survey, the basin still holds the potential for an additional 46.3 billion barrels of oil and 281 trillion cubic feet of natural gas, underscoring its status as a premier oil and gas producing region. The majority of this production comes from the Midland and Delaware Basins, where advances in hydraulic fracturing and horizontal drilling have unlocked previously inaccessible reserves, leading to a significant increase in both oil and gas output over the last decade.

The Permian rig count continues to rise as major oil and gas companies invest in new drilling projects, targeting the basin’s multiple stacked formations. This layered geology allows operators to drill horizontal wells through several productive zones, maximizing oil recovered and natural gas production from a single location. As a result, the Permian Basin remains at the forefront of North American energy production, with its geology providing the foundation for both current success and future potential.

In summary, the geology of the Permian Basin is a story of ancient seas, shifting continents, and the relentless forces of nature, all combining to create one of the world’s richest oil and gas regions. With its complex structure, multiple productive formations, and ongoing technological innovation, the Permian Basin is set to remain a vital source of oil, natural gas, and natural gas liquids for decades to come.

History of Permian Basin in Texas Oil

Technology has continuously improved the North American oil and gas sector’s performance, affordability, and sustainability. Modern advances, such as horizontal drilling, fracking, and downspacing, have helped increase production in the years-old West Texas Permian Basin, making it a premier place to explore. These advances have increased output and reserves, addressing the oil crisis for society.

The earliest documented oil reserves and wells in the Permian Basin were discovered in Mitchell County, highlighting its historical significance in the region's oil exploration and development.

The railroad commission serves as the regulatory authority overseeing oil and gas production in Texas, playing a key role in tracking and reporting production figures and managing resource development within the Permian Basin.

Timeline of the Permian Basin:

1800 - 1859: The Brine Industry and Pre-Oil Development
- Early settlers dug shallow wells for water and, later, deeper ones for brine, inadvertently discovering crude oil.
- In 1806, the Ruffner Brothers drilled the first saltwater well in North America.
- The brine business became robust and, at times, produced crude oil.
- The existence of petroleum resources and blazing springs is highlighted by General George Washington’s visit to the Kanawha Valley in 1775.
1855: the initial Permian Basin Wells
- The U.S. Army Corps of Engineers drilled wells in the basin, encountering oil at 360 feet but without significant petroleum yield.
- The earliest documented well, near the Pecos River, reached an average depth of 360 feet, with oil encountered at a few hundred feet below the surface.
- Although with significant drilling in these parts, most early wells did not yield any petroleum hydrocarbons.
1920s Earliest Oil Discoveries
- Oil was first struck economically at Westbrook field, with Midland becoming a hub following the Santa Rita No. 1 well’s success.
- With the erection of the Hogan Building, Midland became an oil industry center.
1930s - 1940s Economic Ups and Downs
- The Great Depression and World War II caused economic fluctuations, but post-war Midland saw a boom with the Spraberry Trend.
1970s and 1980s Oil Price Volatility
- The Arab embargo and the Iranian Revolution caused crude oil prices to increase and Midland’s economy to flourish. However, oil prices collapsed in 1986, generating economic shockwaves.
2000s The New Millennium: Recovery and New Challenges
- In 2008, oil prices rebounded and hit a record high of $147 per barrel.
- High oil prices in 2008 prompted increased drilling, with innovations in the Wolfberry play.
2009 - 2010: The Great Recession and the Recovery
- Oil prices dropped below $40 a barrel during the Great Recession but climbed to $70 by 2010.
- Drilling becomes less expensive and feasible when prices are reasonable.
2012: Revival and Technological Advancement
- Surging oil prices over $100 a barrel facilitated the development of new plays like Bone Spring and horizontal Wolfcamp.
Boom and Bust Patterns in the Permian Basin
- The Permian Basin suffers boom and bust cycles, with economic success followed by troubled times connected to declining oil prices, infrastructure growth, and property valuations.

This timeline shows how the Permian Basin went from brine extraction to oil and gas production, highlighted by economic development and volatility.

Types of Permian Basin (Sub-Basins)

The Permian Basin is a significant oil and natural gas producing region in the Mid-Continent oil province. Within the Delaware Basin, the Delaware Mountain Group is an important geological unit, representing key Permian rock formations and contributing to the basin's complex stratigraphy. Types of Permian Basin

Delaware Basin

It is highlighted for its deep rock formations, particularly the Wolfcamp and Bone Spring groups. These formations are rich in organic material, making them a priority for oil extraction. Organic rich sections of the Wolfcamp and Bone Spring groups, all with different depositional features, are the main targets in the Delaware Basin. Historically, vertical drilling in the Delaware Basin focused on formations located on the Northwest Shelf, but horizontal drilling has now made these areas more accessible.

A geological survey estimated that the Delaware Basin contains significant oil and natural gas reserves, underscoring its vast resource potential.

With advances in fracking and horizontal drilling, the Delaware Basin has seen a revival in drilling that was previously dormant. This new technology also helped decrease the well costs from $8 million to around $6 million. After this turnaround, the Delaware basin once again became a major Permian oil participant, with a notable increase in gas produced from the region.

Midland Basin

The Midland Basin covers an area of around 13,000 sq. miles. It features notable geological structures, including the eastern shelf, a carbonate platform adjacent to the basin that has historically been targeted for conventional resources. The basin has layered hydrocarbon bearing formations such as the Spraberry, the Wolfcamp, and the Cline Shale. Modern development in the Midland Basin has shifted toward advanced drilling techniques, such as horizontal drilling and hydraulic fracturing, to exploit organic-rich formations more efficiently. The use of new technologies has significantly increased production and reserves in recent years. This area boosted total United States crude oil and natural gas production in 2019. In late 2020 the Midland Basin exceeded natural gas production of 5.8 BCFPD, making it a new record for this basin.

Central Basin

The Central Basin Platform has been an essential part of the Permian Basin’s history over the last century. A historically significant area known for the oil rich San Andres layer, it also includes the Big Lake area, a notable geological feature within the Central Basin Platform that has played a key role in regional resource deposits. The use of horizontal drilling here has notably increased production rates. The Central Basin is located between the Delaware and Midland Basins.

Ultimately, the Permian Basin and its three main sub-basins have gone from being overlooked to becoming a significant energy resource. Geological differences between the Delaware, Midland, and Central Basin Platforms have contributed to the basin’s considerable oil and gas production legacy.

The Heart of Texas Oil: Permian Basin

The Permian Basin, located in western Texas and southern New Mexico, is regarded as the heart of the Texas oil industry and is renowned for its vast reserves of Permian Basin oil. As one of the nation’s largest oil producing regions over the last 100 years, it has played a vital role in shaping regional and national energy policies.

Since the discovery of oil in the 1920s, the basin’s reservoirs continue to provide a reliable production of oil and natural gas that remains crucial to the United States’ economic growth and strength. Technological advances such as horizontal drilling and hydraulic fracturing have significantly increased the productivity of Permian Basin oil extraction, driving industry growth. The US Department of Energy recognizes the Permian Basin as a key contributor to national energy resources, underscoring its federal and economic significance.

These factors make the Permian Basin important to the oil industry:

Substantial Reserves:

The Permian Basin has ample oil and gas. It is a vital source of the United States' petroleum reserves, with multi-billion barrels of accessible oil and trillions of cubic feet of natural gas.

Engineering Advancements:

Fracking and horizontal drilling have transformed the Basin. These advanced drilling methods have unlocked previously inaccessible oil reserves, dramatically expanding the Basin's productive capacity.

Economic Impact:

The oil and gas industry within the Permian Basin has a substantial economic impact locally and nationally. It acts as a catalyst for industrial growth and the transportation sector, generating significant employment opportunities for those surrounded by the Oil Patch.

Global Impact:

The Permian Basin's oil production has made the United States a prominent oil producer and has significantly influenced the dynamics of international energy markets and foreign policy.

Challenges:

The Permian Basin's high oil output has caused ecological and infrastructural repercussions. Significant issues include air pollution, intensive water consumption, and needed enhancements in the existing infrastructure.

Considered to be the backbone of Texas's energy sector, the Permian Basin showcases the state's rich legacy and the vital role it continues to play in America's oil industry. As a dynamic hub of energy production, the Basin has adapted and thrived amidst an ever-changing landscape of the oil & gas industry.

The Most Productive Oil Field in the United States

The Permian Basin underwent an era of steady growth, punctuated by slight variations, in the early 21st century. However, a significant change happened in 2007. The Barnett Shale, located around 300 miles east of Fort Worth, Texas, became recognized as having a large natural gas reserve that could be accessed through new horizontal drilling technology. Mainly, under the direction of George P. Mitchell, operators such as Mitchell Energy have advanced the extraction of gas from resource shale deposits using horizontal drilling and hydraulic fracturing. This approach, along with horizontal drilling, used more powerful fracturing techniques than was previously done in other regions.

As the following decade started, Permian Basin operators started performing hydraulic fracturing in their drilling operations, with unexpectedly positive results. In addition, they applied 3D seismic analysis to aid in their well placement. Furthermore, they adopted horizontal drilling methods, which provided greater accessibility to the reservoir and more surface area to apply successful frac technology.

By 2012, the Permian Basin was securely in the grasp of the Shale Revolution, signaling a watershed moment in the oil and gas sector. This transition increased output, and the Permian Basin became the nation’s most prolific oil field in the United States. As of 2022, Pioneer Natural Resources Co. has surpassed all other oil companies in the Permian Basin in terms of output. The total oil recovered from the Permian Basin has reached billions of barrels, underscoring its immense productivity.

Conclusion

The Permian Basin in Texas is a testament to the remarkable growth and transformation of the oil industry. The Permian Basin has changed the energy landscape from the drilling of shallow brine producing wells to becoming the nation’s most prolific oil producing region.

Of noteworthy relevance to the oil and gas sector is the current discussions surrounding the Permian Basin’s potential role in satisfying the global demand for lithium. This strategic mineral is critical in producing batteries, particularly those utilized in electric vehicles (EVs). As the world undergoes a shift towards sustainable and renewable energy solutions, this new development places the Permian Basin at the intersection of both traditional hydrocarbon based energy and the lithium ion battery market.

The mineral rich Permian Basin— Midland, Delaware, Central Basin Platform, and Marfa Basins—has huge oil and gas potential. The region is now a US petroleum powerhouse thanks to fracking, horizontal well drilling, and seismic analysis.

Texas Permian Basin is significant beyond its geology. Its oil and gas riches have boosted growth, innovation, and employment. It impacts global demography and energy prices.

Environmental issues, infrastructural development, and sustainable practices must be addressed as the Permian Basin grows.

Texas’ oil sector is concentrated in the Permian Basin, which captures American energy’s ingenuity and drive. From geological wonder to economic leader, it shows human innovation and the US oil sector’s prolonged influence.

Mineral View rises as an innovative presence in the heart of Texas’ historic and thriving energy industry, with the goal of equipping people with the knowledge to create an enduring difference via mineral ventures. Mineral View leads this transforming path while the Permian Basin remains crucial to global energy. Whether you use features like Operator Hub, Texas Map, Lease Notification Agent or Cash Flow Analysis, Mineral View is your trusted partner for all your oil and gas sector investments.

About Permian Basin

Geology of the Permian Basin

History of Permian Basin in Texas Oil

Timeline of the Permian Basin:

1800 - 1859: The Brine Industry and Pre-Oil Development

1855: the initial Permian Basin Wells

1920s Earliest Oil Discoveries

1930s - 1940s Economic Ups and Downs

1970s and 1980s Oil Price Volatility

2000s The New Millennium: Recovery and New Challenges

2009 - 2010: The Great Recession and the Recovery

2012: Revival and Technological Advancement

Boom and Bust Patterns in the Permian Basin