Simple Definition

In the energy sector, basin oil and gas is used to describe the crude oil and natural gas that occurs and is produced in huge, bowl-shaped geological formations called sedimentary basins. These basins have served as natural reservoirs over millions of years and have buried and heated organic material to make it transform into valuable hydrocarbons. These particular areas form the greater part of oil and gas supply in the world today.

3D geological cross-section diagram of an oil and gas sedimentary basin showing hydrocarbons migrating from source rock to reservoir rock beneath an impermeable cap rock seal.

How Oil and Gas Basins Form

When an area of the crust of the earth sinks or subsides, this forms a sedimentary basin. With further deepening of this depression, sand, mud and organic materials start to settle in layers that become compacted to become solid sedimentary rock. Out of this underground extreme heat and pressure this buried organic matter gradually turns into oil and natural gas.

To make a basin commercially viable to explore and produce (E&P), there are three essential geological elements that are required:

Source Rock: Rocks which contain organic material and in which the formation of hydrocarbons starts.
Reservoir Rock: These are highly porous and permeable layers of rocks that contain the oil and gas that are on the move.
Seal Rock: A stratigraphic trap, which is impenetrable and composed of a layer of caprock that does not allow the escaping of hydrocarbons.

Under the conditions of these geological factors, it is possible to drill and extract resources successfully in order to extract energy. In addition, new methods of extraction, including horizontal drilling and hydraulic fracturing, can now reach more deep and tight formations, which were once inaccessible, greatly expanding basin production.

Real-World Example

One of the most productive oil and gas areas in the world is the Permian Basin that covers West Texas and New Mexico. It is known as having stacked plays, or several layers of oil bearing reservoir rock layered over the others. This special geology enables the companies in the E&P industry to drill multiple productive regions using just a single wellpad, tapping into billions of barrels of oil and resulting in considerable wealth to the mineral rights owners.

Why This Term Matters

To mineral owners and energy investors, the geographic position of a land asset in reference to a proven basin is an important determinant of the market value. The properties in high-activity, prolific basins tend to bear a high rent bonus, high royalty rate, and increased drilling activity.

Knowing the exact basin that your assets lie in will assist you in estimating:

The potential of long term production.
Future leasing prospects.
Projected royalty income.
The vitality and value of mineral rights in general.

It is in this maneuvering of such variables that it becomes imperative to utilize the oil and gas data platforms such as Mineral View in totality. Through use of high-tech visual data mapping and production insights, the mineral owners and investors are able to go beyond owning a piece of land in a basin, to working at the benefit of maximizing their profits.

Basin vs. Oil Field

There is a difference between these two closely related though not identical terms:

The wider, macro-level geologic area is a basin.
Within that basin there is a smaller, highly delimited region of active extraction and production known as an oil field.

Besides, not every basin has recoverable hydrocarbons. Most of them do not possess the requisite source rock or thermal maturity (heat) and are said to be dry basins. There is a great financial risk of buying leases blindly and not checking the underlying geological information.