HOUSTON, April 8 (UPI) -- Shale basins in Texas are outperforming their domestic peers in part because of their proximity to major markets, a report from Bentek Energy finds.
A report from Bentek, the forecasting unit of energy news agency Platts, finds oil production in the Permian basin in Texas has increased 50 percent in the last three years. For natural gas, production is up 30 percent during the same period.
While other reserve basins are seeing a decline in rig activity, Bentek said the Permian shale has shown resiliency in the era of low oil prices.
"Unlike other U.S. producing basins, the Permian basin is less exposed to adverse market conditions because of its more favorable production economics as well as its closeness to major markets," Bentek analyst Ross Weyno said in an emailed statement.
Last week, ONEOK Partners, an energy company with headquarters in Oklahoma, announced it formed a joint venture with Mexican gas transmission company Fermaca Infrastructure to build the 200-mile-long Roadrunner pipeline that would transport gas from the Permian shale basin in Texas to the Mexican market.
Texas hosts about one-third of total U.S. crude oil reserves. Ryan Sitton, a top official with the state's energy regulator, said last week the long-term durability for Texas oil and natural producers remains "incredibly strong."
The Federal Reserve Bank of Dallas in January warned demand for oil services in the Permian and Eagle Ford shale basins had slowed down. Bentek's report said resiliency is not the same as immunity for Texas shale.
"If crude prices fall to less than $40 per barrel for a sustained period, Permian production would be at risk," Weyno said.
