The Permanence of the Permian Basin

My July article for Pruitt Tool and Supply's newletter Worm Dirt.

This month we drill into that seemingly endless lake of oil called the Permian Basin.

The Permian Basin has the distinction of being recognized as the most productive petroleum producing region in the Continental United States. Located in West Texas and southeastern New Mexico it underlies an area slightly larger than the state of Indiana. A down warped area eventually covered by the Permian Sea, it continued through much of the Permian period and consequently contains one of the thickest deposits of Permian rock found anywhere. Structurally, a basin in the subsurface, much of it lies underneath the Llano Estacado.
When the Spanish Conquistador, Francisco Coronado spied the huge Caprock Escarpment which caused him to dub the area the "Palisaded Plains" or the more commonly known "staked plains", he had no idea of the wealth waiting below that vast sea of grass.
His written account of the area was pretty descriptive...."I reached some plains so vast that I did not find their limit anywhere I went, although I traveled over them for more than 300 leagues...with no more land marks than if we had been swallowed up by the sea....there was not a stone, nor bit of rising ground, nor tree, nor shrub, nor anything to go by." Later explorers such as Randolph Marcy in 1852 found no argument with Coronado's statement.
One of the richest fields of the Permian Basin was owned by Ira and Ann Yates. The Yates’ had swapped a thriving general store for a sprawling ranch in Pecos County and were starting to regret that decision. The land was too poor to sustain enough cattle or sheep to be profitable and they were having a difficult time paying the mortgage and taxes on their property. On a hunch, Ira Yates invited Transcontinental Oil Company to come exploring.
In 1926, an exploratory well was drilled into the San Andres formation of the Permian Basin lying beneath the Yates ranch. At approximately 1,000 feet it "gushed" a spew of crude oil into the air. With no way to contain the spew, the crew dammed a nearby draw building a crude holding pond for their oil.
Punching away, other wells were showing impressive strikes and Yates and the oilmen knew they had a significant find.
However, just as it happened in other fields in this period of time, oil production facilities and transportation infrastructure were lacking. But the richness of the Yates Field spurred Humble Pipe Line Co. to hurriedly construct a 55,000 barrel storage tank which proved to be woefully inadequate.
The first five wells drilled on the Yates Field together produced an average of 9,009 barrels a day which was more than could be stored or moved. A sixth well blew out due to extreme gas pressure and 500 barrels of oil a day blew through the damaged well onto the ground, pooling in nearby canyons. Most of that "blow out" oil was recovered by damming the canyons and sucking it up with pumps.
In 1929 the spudding of well Yates 30-A blew out with the spectacular flow of 8,528 barrels per hour - over 200,00 in a day setting a world record.
The high production rate of the Yates field coupled with lack of storage and transport caused the State of Texas Railroad Commission to step in and require a proration of the field for the first time in Texas history.
The Railroad Commission's right to oversee petroleum production gave them the power to require all operators be given an equal share in the pipeline outlet based on their wells’ total field production. Additionally, the RCC restricted the depth operators could drill into the cavernous reservoir which gave each of them an equal advantage.
Naturally as it happened in all big oil strikes, an instant boomtown was born around the red barn on the Yates Ranch and given the name Redbarn. This early town was located about 3 miles south of present day Iraan, TX (pronounced Eye-ruh-ann - a compilation of the names of Ira and Ann Yates.) The early boomtown of Redbarn, whose permanent population was never more than 75 was abandoned in 1952 giving Iraan unchallenged bragging rights to the history of the Yates Field in the Permian Basin area.
According to the Railroad Commission of Texas' website, there were 355 active rigs in the Permian Basin in 2011. It states, “The Permian Basin remains a significant oil-producing area, producing more than 270 million barrels of oil in 2010 and more than 280 million barrels in 2011. The Permian Basin has produced over 30 billion barrels of oil and 75 trillion cubic feet of gas and it is estimated by industry experts to contain recoverable oil and natural gas resources exceeding what has been produced over the last 90 years. Recent increased use of enhanced-recovery practices in the Permian Basin has produced a substantial impact on U.S. oil production.”