The Permian Basin is America's most important oil-producing region. It sits in West Texas and the southeastern corner of New Mexico. The basin is enormous. It stretches about 250 miles from east to west and about 300 miles from north to south. Midland, Texas sits near the center of it. The basin is named after the Permian Period — a time in Earth's history that ended about 252 million years ago. That is when most of the rock layers holding today's oil were laid down.
How Much Oil Does the Permian Produce?
The Permian Basin produces about 6 million barrels of oil per day. That count includes both the Texas side and the New Mexico side. For comparison, the entire country of Saudi Arabia produces about 9 to 10 million barrels per day. So the Permian Basin alone produces more oil than any single country except Saudi Arabia and Russia. It is, by every measure, one of the most productive oil fields in world history.
What Are the Two Main Sub-Basins?
The Permian Basin is actually made up of two main parts. The Midland Basin is on the eastern side. The Delaware Basin is on the western side, extending into New Mexico. Between them sits the Central Basin Platform — a raised area of older rock. The Midland and Delaware Basins are separated by thousands of feet of geology but share the same general history of oil and gas formation.
What Formations Produce the Most Oil?
The Permian has dozens of oil-bearing rock layers called formations. The biggest producers today are shale formations. Shale is a type of rock that forms from compressed mud and clay. Oil got trapped inside shale millions of years ago. Until recently, drillers couldn't get to it efficiently. Today's technology makes it possible.
The top producing formations in the Permian Basin are:
- Wolfcamp Shale — This is the biggest single oil formation in the United States. It sits in both the Midland and Delaware Basins. The U.S. Geological Survey estimates the Wolfcamp holds over 20 billion barrels of recoverable oil.
- Spraberry Formation — Located mostly in the Midland Basin, this formation has been producing oil since the 1940s. Horizontal drilling has unlocked much more from it in recent years.
- Bone Spring Formation — Found in the Delaware Basin. Drillers can target three separate layers within it, each one holding significant oil.
- Dean Sandstone and Jo Mill — Older formations that still produce meaningful amounts of oil in the Midland Basin.
How Does Horizontal Drilling Work Here?
Most Permian Basin wells today use horizontal drilling. Here is how it works in simple terms. A rig drills straight down to the target rock layer. That might be 8,000 to 12,000 feet underground. Then the drill bit is steered sideways. It drills horizontally through the rock layer for one to two miles. This puts the well in contact with far more oil-bearing rock than a straight down well could reach. After drilling, the well is completed with hydraulic fracturing — pumping high-pressure fluid to crack the rock and let oil flow. A typical Permian well costs $8 to $12 million to drill and complete, but it can produce millions of dollars of oil over its lifetime.
Who Are the Big Operators?
The Permian Basin is dominated by large public companies. ExxonMobil, Pioneer Natural Resources (now part of ExxonMobil), ConocoPhillips, Chevron, and Occidental Petroleum are among the biggest players. But hundreds of smaller independent companies also operate here. The Texas Railroad Commission's records show all of them, well by well, permit by permit.
Why Does the Permian Matter for Your Prospects?
If you are evaluating land or mineral rights in West Texas, understanding the Permian Basin is essential. The formations you are likely dealing with — Wolfcamp, Spraberry, Bone Spring — each have different characteristics. Depth, thickness, and oil quality all vary across the basin. Historical scout tickets and production records from the Railroad Commission can tell you what formations were found on nearby wells. That history is one of the best guides to what you might find when you drill.