American Oil and Gas Reporter - December 2018 - 97

Stephanie Reed (left),
senior vice president of
land and marketing at
Parsley Energy, and
Travis Stice, chief executive officer of Diamondback Energy Inc.,
discuss Permian growth
plans during a panel
discussion that also included David Pursell,
senior vice president
planning, reserves and
fundamentals at Apache
Corp.

at the end of the tunnel, but I think we are
going to have limited NGL fractionation
capacity into 2020," he predicted.
Corey Prologo, North America director
at Trafigura Trading LLC, said additional
crude oil pipelines coming on stream
during the next year would include the
670,000 bbl/d Cactus 2, the EPIC NGL
conversion capable of carrying 400,000
bbl/d and the Gray Oak pipeline expected
to transport as much as 700,000 bbl/d.
The net result of the new capacity will
be that the bottleneck will move to the
coast, Prologo forecast.
Current port infrastructure is insufficient
to handle the surge, Prologo suggested.
Very large crude carrier vessels will be
key to eliminating coastal bottlenecks, he
concluded, but 675 more ships are needed
each year to transport the growing crude
production and relieve coastal bottlenecks.
Permian Progress
An industry panel of corporate executives detailed employment growth, new
office openings and plans to maintain rig
counts and frac spreads throughout the
Permian Basin.
Stephanie Reed, senior vice president
of land and marketing at Austin-based
Parsley Energy Inc., said the company,
which employs 250 in Midland, planned
to open a third Permian field office soon.
According to Reed, the company has 16
rigs drilling on its acreage in the Midland
and southern Delaware basins, where the
company at any given time is assessing
the trade value of 10-12 properties, she
said. Nevertheless, she added, the vast
majority of the company's production
growth has come through the drill bit.
Travis Stice, chief executive officer
of Midland-based Diamondback Energy
Inc., said the company would be running
24 rigs in the basin after it finished assuming the operations of Energen Corporation. According to Stice, Diamondback
is acquiring the company in a $9.2 billion

all-stock transaction, which will give the
combined entities more than 273,000 net
tier-one Permian Basin acres and more
than 7,200 horizontal locations.
Diamondback is in the process of mov-

ing Energen employees from Birmingham,
Al., to Midland, he said. "We have told
employees that Midland is a special place,"
Stice described. "You have to bloom
where you are planted and get engaged,
whether that is in youth sports, church or
other activities . . . We are encouraging
people to come in and be a part of the
change, not just a part of the past."
David Pursell, senior vice president
planning, reserves and fundamentals at
Houston-based Apache Corp., said the
company, which employs 200 in the office
and about 500 in the field in the Permian
Basin, continues to keep 18 rigs busy in
the basin.
Despite operational challenges and
the potential for commodity price fluctuations "This is the area that will suffer
the least," Pursell told PBPA. "I sleep a
lot better thinking about assets in West
Texas than anywhere else in the world."
r

Permian Future Inﬂuenced By
Texas And New Mexico Issues
MIDLAND-State and federal legislative
and regulatory issues will continue to
impact Permian Basin companies and communities, speakers reported during the Permian Basin Petroleum Association's annual
meeting, held Oct. 24-25 in Midland.
In a morning panel discussion, Texas
state lawmakers told PBPA that the biennium budget, infrastructure, healthcare
and education would be top issues in the
upcoming 86th Legislature, which convenes Jan. 8, 2019 in Austin.
Although roads throughout the basin
are crowded, obtaining funds will be
complicated by perennial tensions over
urban versus rural priorities, predicted
Senator Dawn Buckingham, R-Lakeway.
Some have broached the idea of focusing

additional transportation funding on the
state's top 100 traffic choke points, she
continued. However, Buckingham noted,
"None of those are in West Texas."
Representative Brooks Landgraf, ROdessa, said traffic congestion and corresponding accidents had made additional
transportation funding crucial for his district. "Transportation funding is not a
quality of life issue out here," he maintained. "It is a life and death issue."
Lawmakers will weigh how to spend
a $110 billion annual budget, 38 percent
of which is earmarked for public schools,
said Senator Kel Seliger, R-Amarillo,
whose district includes much of the Permian Basin. Lawmakers will debate the
future of the state's "Robin Hood" system

PBPA President Ben Shepperd (left)
recognizes the work of outgoing
Chairman Clint Walker, who completed his two-year term at the association's annual meeting.

DECEMBER 2018 97

American Oil and Gas Reporter - December 2018

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