Before today’s tight oil boom, West Texas was a wasteland…
In the early 1980s, when oil and gas production saw massive declines, so too did the rural communities that had thrived during the glut of the ’50s and ’60s.
Between 1982 and 1985, West Texas lost 50,000 oil and gas jobs. This trend continued in the following decades and had a devastating effect on local economies, since many small towns relied on the oil and gas industry for their survival. As oil output in the region declined, it put considerable strain on both families and businesses in the area.
Fortunately, the boom times are back…
As a whole, Texas’ population increased by 1.3 million from 2010 to 2013. Most of this growth happened where tight oil and gas development is booming, and in two places in particular: the Eagle Ford in South Texas and the Permian Basin in the West.
In fact, the Odessa-Midland area in the Permian Basin was one of the fastest-growing municipalities in the U.S. over the last three years.
Permian Explosion
Of course, this makes perfect sense to us. When you have an oil and gas boom of this caliber, it’s only normal to expect people to move back into the area, inevitably giving the economy a desperately needed reboot.
But let’s be clear here: this isn’t even close to over…
On Monday, the University of Texas San Antonio released a study projecting billions of dollars’ worth of growth ahead, all thanks to the Cline Shale.
Seen in light blue on the right side of the map above, the Cline Shale is found deep within the Permian Basin and has seen much less activity compared to other major formations.
Now, producers are ready to ramp up drilling…
As a result, companies are expected to add approximately 30,000 jobs over the next eight years to boost production from the Cline formation. These new workers will help revive other industries in what were once ghost towns destroyed by the peak of conventional oil in Texas in the 1980s.
According to the UT study, the 10 counties surrounding the Cline will see an extra $20.5 billion added to their economies by 2022 thanks to growth in oil and gas development there.
In fact, that amount could jump to a staggering $34 billion depending on the price of oil.
Moving On Up to the East Side
Over the next few years, we’re going to start seeing those West Texas ghost towns come back to life as drillers chase big paydays in the Cline...
During 2012, the oil and gas industry in the Permian paid about $1 billion in salary and wages. You can bet they’ll be willing to pay more for the prospect of tapping into the Cline Shale.
As you can see below, the Permian Basin produces about 1.5 million barrels of oil per day and 5.62 billion cubic feet of natural gas per day.
Right now, the lion’s share of this production comes from the Spraberry formation.
If the Cline proves to be anywhere near as good as the Spraberry, expect to see these numbers jump in a big way.
As it stands now, the Spraberry is not only the highest producing oil field in West Texas, but it’s also one of the only places where production is increasing!
Look, we aren’t talking about risk-laden wildcatters crossing their fingers in the hope that they strike oil. One of the most profitable characteristics of this play is that it is loaded with several pay zones. And in the northeastern part of the Permian, the rewards are even more lucrative when you include the Cline’s potential.
At current estimates, there could be as much as 30 billion barrels of oil locked in this one formation!
And even though the early investors in this play have been banking winner after winner in the Midland Basin, the best part is that there is still an enormous amount of growth ahead.
Until next time, Keith Kohl A true insider in the technology and energy
markets, Keith’s research has helped everyday investors capitalize from the rapid adoption of new
technology trends and energy transitions. Keith connects with hundreds of thousands of readers as the
Managing Editor of Energy & Capital, as well as the
investment director of Angel Publishing’s
Energy Investor and Technology and
Opportunity. For nearly two decades, Keith has been providing in-depth coverage of the hottest
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they go mainstream — from the shale oil and gas boom in the United States to the red-hot EV revolution
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