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Editors Comment
February 15, 2008
Operating costs jump in the Permian Basin
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Between mid-2006 and mid-2007, operating costs shot precipitously upward in the Permian Basin. Ziff Energy Group recently completed a benchmarking study in the West Texas and southeastern New Mexico oil-producing powerhouse. The Calgary-based consulting firm looked at 134 fields that account for half of the basin’s oil and one-third of its gas production.


Permian Basin oil fields average $10.42 per barrel in operating costs, and gas fields run $1.42 per thousand cubic feet. Economies of scale seem to benefit the leading operators, however, which posted average costs of under $6.50 per barrel and $0.80 per thousand.

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-- Peggy Williams

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