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As I wrote up this analysis of the best investments in oil, a familiar saying came to mind: "Everything old is new again."
A truer statement could not be said about the Permian Basin, which is a geological formation roughly 300 miles long and 250 miles across that stretches across west Texas and eastern New Mexico.
It has been producing oil (29 billion barrels worth) since 1921. But even as recently as a decade ago, it was thought to be played out.
That was before new drilling technologies such as fracking were considered for use in the region. Nearly 48% of all drilling rigs in the country are drilling right now in Texas, with over 400 drilling rigs in the Permian Basin alone.
No wonder then that oil production in Texas doubled in the past three years to the highest level since the 1980s...
Texas Railroad Commissioner David Porter thinks the production potential from the Permian Basin is huge. He was quoted in the Financial Times as saying, "If the United States achieves energy independence, it will be because of the Permian Basin."
And that means some of the best oil investments will be focused in this region.
Permian: Better than the Bakken's Best Investments?
The Permian Basin once again is one of the centers of U.S. oil production, along with the Eagle Ford shale formation in south Texas and the Bakken/Three Forks shale formation in North Dakota.
International energy analysts Wood Mackenzie forecast that production in the Bakken could reach 1.5 million barrels a day by 2025 and production from Eagle Ford could reach 1.35 million barrels a day.
Wood Mackenzie thinks the Permian has even more potential.
It believes oil production from the Permian Basin could reach as high as 3.5 million barrels a day by 2025.
That estimate may be possible as new drilling technologies have begun unlocking parts of the hydrocarbon reservoir that are absolutely huge.