Ring Energy And The Central Basin
The Central Basin, a distinctive geological feature within the Permian Basin, occupies a substantial area in West Texas and southeastern New Mexico, USA. Spanning approximately 7,000 square miles (18,000 square kilometers), the Central Basin Platform is bounded by its neighboring basins and platforms.
To the east, the Central Basin is bordered by the Midland Basin, another major sub-basin of the Permian Basin. On the western side sits the Delaware Basin, another prominent sub-basin of the Permian Basin.
Story By Melba McEwen |Midland Telegram Reporter | Advancing technology is teaching old dogs — in this case, old oil fields — new tricks.
“I’ve been telling people for four years the Central Basin Platform has been overlooked for a long time,” said Paul McKinney, chairman of the board and chief executive officer of Ring Energy.
Speaking with the Reporter-Telegram, he said he believes the platform is overlooked for several reasons. First, it requires more geoscience and geoengineering time. That compares to the Midland and Delaware Basin shales, which hold tremendous resources that lend themselves to a manufacturing mode of development.
Second, he said success depends on basing completion programs on the rock, something his company does.
“It’s not cookie cutter. It requires engineering time, geology, tailoring completion programs,” he said.
Because of those challenges, McKinney said spending on the Central Basin Platform and Northwestern Shelf came to a halt. However, companies like Ring and other small operators and private equity-backed companies took the time to look at opportunities in the area.
“With today’s technology like horizontal drilling, these locations are economic,” and zones that had been considered uneconomic are now economic, he said. “We’ve been able to deliver performance,” and now spending on the platform is picking up steam. Production from the platform won’t add billions of barrels of reserves, “but the good news from our standpoint is the opportunities remain large.”
McKinney predicted more opportunities will arise as assets find their way to market amid the wave of upstream consolidation, and he said he is excited about the opportunities. Another cause of optimism for McKinney is the pending change in administration, which he said could bring more stability in the regulatory arena and lifting of restrictions on liquefied natural gas facilities.
Through the development of its Central Basin Platform assets, the company reported record production of 20,108 barrels of oil equivalent per day in the third quarter, exceeding the high end of guidance. Ring also divested non-core vertical wells and associated facilities for $5.5 million. That, combined with higher cash flow from operations let the company reduce debt by $15 million.
In the year’s final quarter, the company will finalize testing of efforts to unlock new producing zones within its existing acreage, representing a new phase of potential inventory growth through seeking to identify and develop new hydrocarbon resources organically.
“We plan to produce our existing assets and reduce costs as much as possible, protecting our balance sheet,” McKinney said. Ring is testing horizontal drilling in Crane County, and he said activity will be a function of the most economic ways to tap reserves.
The company will also continue considering strategic acquisitions as a primary source of production and reserves growth.
Since he joined Ring in 2020, McKinney said the company has made three acquisitions and has managed to grow those resources beyond what was expected when the acquisitions were made. He credits the company’s success to fiscal discipline, strategic capital allocation and the teams overseeing asset development.
“We’re taking modern technology of all kinds and applying it to older conventional areas, and it’s paying dividends,” he said.
Story By Melba McEwen |Midland Telegram Reporter |Origianl Story HERE
Central Basin Oil Production
When and how did it start?
The Central Basin’s oil history began with the discovery of the Yates Oil Field in 1926 near the city of Iraan, Texas. The Yates Field marked the start of significant oil production in the region. It was discovered through wildcat drilling efforts led by independent oilmen. The Yates discovery opened the door to further exploration and development within the Central Basin Platform.
The 1930s marked a period of rapid expansion in oil production within the Central Basin. The development of new fields and the implementation of enhanced drilling techniques led to increased output. The oil boom in the Central Basin and other parts of Texas contributed to the state’s emergence as a major player in the oil industry.
The late 20th century and early 21st century witnessed further growth in oil production due to the application of advanced technologies like horizontal drilling and waterflooding. The Central Basin’s hydrocarbon-rich formations, such as the San Andres and Grayburg formations, became focal points for exploration and production efforts.
