Permian Basin is proving to be the gift that keeps on giving as production levels continue to soar, according to a report by GlobalData. Companies involved in the basin have been richly rewarded up until this point, and can anticipate even greater productivity in the future.
As of April 15, there were 492 rigs dotted around the Permian Basin, which spreads mainly across Texas and New Mexico. This is a 94-rig increase from the previous year and an indication of the development speed in the area. The abundance of crude oil and gas from the basin is a continuing source of interest for oil and gas firms throughout the country. Occidental Petroleum plans to invest $1.660 billion in the Permian and Cimarex Energy Co. aims to invest $775 million.
The attractive rewards here have boosted deal activity substantially with no less than 13 deals completed in 2011 alone – representing a total value of $1.322 billion. One of the largest was Petrohawk Energy’s strategic acquisition of 325,000 net acres in the Texas region in a deal worth $455 million. It is expected that the overall gross production from the Permian Basin will reach 534 MMboe in 2013 and stabilize at 784 MMboe in 2020.