Image source: Getty Images. The Permian Basin of west Texas and southeast New Mexico is one of the most prolific oil and gas producing regions in the country. The basin produced a prodigious 29 billion barrels of oil since output began in 1921. However, despite that rich production history, its best days could lie ahead. Thanks to new extraction techniques oil companies have finally figured out how to unlock the oil and gas trapped within its unique geology encompassing several stacked layers of hydrocarbon-bearing rock formations. According to analysts at research firm Rystad Energy, the Permian has the potential to produce another 20 billion barrels of oil from these tight rock resources alone. With so much oil potential, the Permian Basin is one of the top oil plays in the country, which has producers flocking to unlock its energy resources. Permian Basin 101 The Permian Basin encompasses an area that stretches 250 miles wide and 300 miles long. However, it can be split into two zones, the Delaware Basin on the west and the Midland Basin to the east. Hydrocarbon-rich layers of rocks lie beneath both sections: Source: EIA. h According to the U.S. Energy Information Administration (EIA), the six formations detailed on the above map fueled a 60% increase in the Permian's output since 2007. That increase pushed it past the Gulf of Mexico as America's leading oil production basin in 2013. Currently, the Permian accounts for about a quarter of the country's oil production. With output totaling more than 2 million barrels per day, the Permian is the second largest oil field in the world behind Saudi Arabia's Ghawar field. That said, it has quite a way to go to catch up given that Ghawar produces 5 million barrels per day, which is more than 5% of global oil output. The Permian is also believed to be second to Ghawar in recoverable resources. According to analysis from leading Permian driller Pioneer Natural Resources (NYSE: PXD), the Spraberry/Wolfcamp formations alone could hold 75 billion barrels of oil equivalent (BOE) recoverable resources, or slightly less than half of Ghawar's nearly 160 billion BOE. That said, most other analysts peg that number in the 20 billion barrel range. The leading Permian Basin players While there are hundreds of energy companies in the Permian Basin, the bulk of the acreage is controlled by five large players, while less than 10 producers account for 50% of the basin's output. The most dominant positions are held by: Producer Permian Basin acreage Average daily production volume in 2015 (BOE/d) Chevron ~ 2 million net acres 125,000 Occidental Petroleum ~ 1.5 million net acres 255,000 Apache ~ 1.7 million net acres 171,000 Pioneer Natural Resources ~ 800,000 gross acres 125,000 Concho Resources ~ 650,000 net acres 143,000 Data source: Rystad Energy and company investor presentations. Big oil giant Chevron (NYSE: CVX) is currently the largest acreage holder. However, the company has yet to turn that into a leading production position. That said, the oil giant has been rapidly ramping its production, which increased 33% last year. Further, it believes it can grow its Permian production up to as much as 350,000 barrels of oil equivalent per day (BOE/d) by 2020 if oil prices cooperate. Overall, the oil giant estimates that more than 9 billion barrels of oil equivalent recoverable resources lie beneath its acreage. While Chevron holds the most acreage, Occidental Petroleum (NYSE: OXY) is by far the basin's largest producer. That said, more than half of the company's production comes from using enhanced oil recovery techniques, such as carbon dioxide injection, to coax oil out of legacy formations. However, shale is a major growth driver for Occidental, with its production from tight oil resources jumping 31% year over year. Apache (NYSE: APA), likewise, has a vast Permian position with the bulk of its production currently coming from conventional sources. However, that is beginning to change now that the company has shifted to horizontal drilling. In just two years production increased 155,000 BOE/d to its current rate around 171,000 BOE/d. That rate is poised to keep going higher as pricing improves and the company ramps up development. Pioneer Natural Resources and Concho Resources (NYSE: CXO), on the other hand, have both been early leaders using horizontal drilling to fuel significant growth from the Permian. Pioneer is focusing virtually all of its attention on the Midland Basin's Spraberry/Wolfcamp formations and is the largest producer in that region. That production is growing at a rapid pace, with the company expected to drive 12% production growth this year, which will be ramped up to 13% to 17% next year. Meanwhile, Concho Resources has grown its production by a 34% compound annual growth rate since its IPO in 2007. That said, the company has taken a cautious approach in 2016 by holding back growth. However, it plans to restart its growth engine next year as long as prices cooperate and it believes its strong Permian position can drive double-digit production growth for years to come. Investor takeaway The Permian Basin has long been one of America's most vital energy producing regions. However, its importance is growing now that producers discovered how to unlock the oil and gas trapped in the tight rocks stacked below the surface. These companies are just starting to scratch the surface, which suggests that this legacy oil basin's best days could very well be ahead of it. 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