Local News

Largest U.S. Oil Deposit Found: Hype or Hope?

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Tony Maples Photography


On November 15, 2016, the U S Geological Survey announced that the Wolfcamp shale in the Midland Basin portion of Texas’ Permian Basin contains around 20 billion barrels of oil and 16 trillion cubic feet of natural gas.  This is the largest estimated continuous oil accumulation that USGS has assessed in the United States.  Because the State of Texas is a global leader in the energy industry, holds about one third of the supply of oil in the United States, and Houston is the energy capital of the world, the news sent ripples throughout the state.

The Permian Basin in west Texas has long been a major source of oil, and the Wolfcamp Shale formation has been known of many years.  The recent announcement expands the area included in this formation.  But what does this announcement mean in practical terms?

USGS Map of the Wolfcamp Shale Formation


Photo: US Geological Survey

Although estimates of $900,000,000 in value have been published, this is based on a $45 per barrel price for West Texas Intermediate crude and doesn’t include the expense of drilling, completion, and infrastructure.  The cost of exploiting this field far outstrips today’s spot price for WTI of $44.87.  So, what does this discovery mean to you?

Is recovery of this oil economically viable?

Apache Corporation, Brent Briscoe with crude processing equipment at central tank farm Adair San Andreas Unit, Welch, TX.

Photo: Apache Oil

Apache Oil (a Houston based company) has been successfully exploiting the area north of Alpine and west northwest of Fort Stockton, an area known as the Alpine High (not to be confused with what students at Sul Ross University might be doing) since early this year.  However, a source in the oil and gas business (who asked to remain anonymous) who is familiar with the situation cautions readers that “when you see people in the oil and gas business seeking investors outside the core oil and gas business funding sources, don’t walk away, run.”  He says that this announcement, while encouraging for an oil-driven economy, will have more impact with higher prices.

Another reason to love west Texas.

Big Bend Fossils

Photo: National Park Service/Big Bend National Park

Big Bend National Park opens a new exhibit on fossils in the Park on January 14, 2017 showcasing 20,000,000 years of fossils.  Now that’s exciting!