Monday, February 6th, 2017 and is filed under Uncategorized
In 2016, land acquisition deals in the Permian Basin topped $28 billion, which more than tripled deals struck in 2015. This makes Permian Basin land the most sought after oil and gas land in the world.
The Permian Basin is unique in that it was a productive area for crude oil long before the shale boom. That means existing infrastructure. The pipeline network servicing the area is ideal in that it makes for speedy delivery to Gulf Coast refineries or to coastal ports that now export crude throughout the world now that the export ban has been lifted.
This existing infrastructure results in lower production costs than in other shale plays in the U.S. Breakeven costs in most shale plays in the U.S. are at $60 per barrel and above while those costs in the Permian can be in the low $50s and below, which makes the Permian even more attractive to investors.
Already in 2017, Permian Basin land deals have exceeded $9 billion, which puts the Permian on pace to top even last year’s deals.
These land deals mean even more money for the area in exploration and production. Hiring in the Permian is up. Halliburton alone has announced plans to bring 200 jobs to the Permian. In addition, the rig count has increased by about 28% in the last year.
The oil and gas industry is looking to the Permian Basin to lead the way in investments in 2017 and apparently, the Permian is off to a good start.