The Permian is the fastest growing oil play in the world – by far. That can create big logistical problems, like a scarcity of pipeline space and deep discounts to other US oil hub prices. Or like higher service costs. How does a small operator navigate these issues, and what opportunities come out of this?
To find out, I sat down with Mehran Ehsan, CEO of Permex Petroleum (CSE:OIL). Mehran just went public last year, and has since tripled his production. We talk pricing, we talk logistics, M&A opportunities, organic growth etc.
And I ask him- – how / why does the very shallow (and therefore low cost) San Andres formation – where Permex is operating – produce such light oil that gets great pricing? Oil geology doesn’t work that way; gooey heavy oil that gets a MUCH lower pricing usually sits on top in the shallow formations, with oil getting lighter as you get deeper (it gets more “cooked” with greater heat and pressure with depth) and eventually turns into natgas. Having a low cost formation produce such a high value hydrocarbon is unusual.
In this short interview, you will get a boots-on-the-ground perspective on how the Permian is developing, and what operators are doing to navigate all the challenges of being in the world’s fastest growing oil play.
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Keith SchaeferPublisher, Oil and Gas Investments Bulletin