Any attempt to weigh the Midland Basin versus the Delaware Basin ought to begin with some definitions. The Midland Basin and Delaware Basin, the two largest sub-basins of the sprawling and prolific Permian Basin, stand as the hottest oil and gas plays in the United States today. The Midland Basin falls completely within the bounds of far West Texas, while the Delaware Basin, situated further west, lies partly in Texas and partly in Southeast New Mexico. These news-making regions, being both part of a larger, better known basin (the Permian), might seem to most observers as near-identical oilfields. But differences exist. This discussion will explore the differences, which are significant.
The Midland Basin: Complex and Prolific
The Midland Basin, located in the central part of the Permian Basin, enjoys renown for its stacked and prolific sedimentary rocks, which contain vast reserves of hydrocarbons. The play taps multiple layers of oil-rich formations, such as the Spraberry, Wolfcamp, and Bone Spring formations, all within a complex and faulted geology.
These formations have been producing oil and gas for decades. Their interbedded shales and sandstones act as source rocks, reservoirs, and seals for hydrocarbons. Their stacked nature makes the Midland Basin a highly productive and sought-after area for oil and gas exploration and production.
Located in the eastern part of the Permian Basin, the Midland Basin has gentle topography with relatively flat terrain.
Midland Basin versus the Delaware Basin
The Delaware Basin, meanwhile, covers the westernmost reaches of the Permian Basin, characterized by an even more complex geology with a mix of uplifted and faulted terrain. The Delaware Basin’s stacked formations, including the Bone Spring, Wolfcamp, Avalon, and Delaware Mountain Group, contain significant oil and gas resources. These formations feature a combination of carbonate rocks, shale, and sandstone, which act as source rocks, reservoirs, and seals for hydrocarbons.
Midland Basin versus the Delaware Basin: Production Characteristics
While both the Midland Basin and the Delaware Basin chart big production statistics, they exhibit different production characteristics.
The Midland Basin, known for its long history of oil production, dates back to the 1920s. Sometimes called an “oily” basin, with oil accounting for the majority of the hydrocarbon production (as opposed to natural gas), the Midland Basin allows for efficient drilling and production operations. Historically, crude oil has paid better than natural gas, generally speaking.
The Midland Basin has also seen a surge in natural gas production as a byproduct of oil drilling. When natural gas gets produced even though the primary objective is crude oil, such gas is called “associated gas.” The Midland Basin produces associated natural gas, while not being as gas-rich as some other basins.
The Delaware Difference
On the other hand, the Delaware Basin carries a reputation for its high potential for both oil and gas production. This more complex basin has varying geologic structures and higher well costs. Just the same, the Delaware Basin stands as one of the most prolific shale plays in the world, with significant reserves of oil, natural gas, and natural gas liquids (NGLs). The Delaware has seen a rapid increase in production in recent years, particularly in the Wolfcamp and Bone Spring formations, which are known for their high-quality hydrocarbons.
Midland Basin versus the Delaware Basin: Changes Over Time
Between them, the Midland Basin and the Delaware Basin produce most of the oil, gas, and natural gas liquids produced by the Permian Basin. And the Permian itself accounts for more than 40 percent of total U.S. oil production and 23 percent of total U.S. natural gas production.
Associated gas has been on the rise in the Permian Basin, but especially in the Delaware Basin. One reason for this: reduction in formation pressure. The more times an oil company punches a hole in a formation, the more the pressure of that formation is reduced. So the longer the oil industry works a specific play, the greater proportion of natural gas production they will see.
While the Permian Basin, on the whole, has long been known as an oily basin, that distinction slowly changes with time. In our analysis of the Midland Basin versus the Delaware Basin, this factor applies to both. Both plays are seeing the shift. It holds true especially for the Delaware Basin, which has always held a higher ratio of gas to oil, as compared to the Midland Basin.
But with the heavy activity in the Delaware in the 21st century, that trend has accelerated. The Permian Basin’s eastern half has always been oilier than its western half. Now, however, both areas see increasing ratios of gas to oil in their drilling results.
Nonetheless, crude production remains high across the region. And associated gas is a commodity that is prized more than ever, with liquified natural gas (LNG) having become a viable export to the world.
The Permian Basin has a bright future still ahead of it as it ventures into its second century. The Midland Basin and the Delaware Basin are the biggest reasons why.