$175 million in oil and gas assets bought by Permian Resources

Oil and gas producers continued increasing their holdings in the Permian Basin, as some of the largest energy companies in the world also targeted the region for growth in fossil fuel production.

Permian Resources on Jan. 30 said it added 14,000 net acres in the region, along with 5,300 net royalty acres in the Delaware Basin – the western sub-basin of the Permian straddling the southeast New Mexico border with West Texas – since its $4.5 billion merger with Earthstone in November 2023.

Most recently, the company reported it acquired 11,500 leasehold acres and 4,000 royalty acres in Eddy County from an undisclosed seller for about $175 million.
More:Lawmakers look to send more state funds to clean up New Mexico's abandoned oil wells

More:Lawmakers look to send more state funds to clean up New Mexico's abandoned oil wells

Most of the lands are undeveloped, read a company announcement, and Permian Resources said it identified more than 100 operated locations, with the acquisition running alongside the Earthstone properties.

Chief Executive Officer Will Hickey said the company planned to begin developing its newly acquired assets.
“We are excited to begin development on the recently acquired acreage later this year,” Hickey said.

More:Too far or not far enough? Industry, environmentalist unite to opposed oil and gas reforms

Permian Resources also said it executed an acreage trade in Lea County, trading 2,000 acres contiguous to recent acquisitions for 2,000 acres of land that was not on Permian Resources near-term drilling schedule.
Development on those lands was also expected to begin this year.

Since 2023, Permian Resources reported it added 17,000 net acres, 7,300 royalty acres and more than 200 operated locations in the Delaware Basin.

More:Oil and gas supported by NM, federal subsidies in Permian Basin

Permian Resources’ growth came as energy goliaths Exxon Mobil and Chevron both announced increases in oil and gas production in the Permian Basin in recent earnings reports for the fourth quarter of 2023.

Chevron reported in its Feb. 2 earnings call it produced a record 867,000 boepd and planned to hit 1 million boepd by 2025, read the presentation.

This comes after Chevron merged with PDC Energy for $6.3 billion in May 2023 and bought out Hess Energy for about $53 billion in October 2023.

More:2023 saw $103 billion in Permian Basin oil and gas mergers, report says

“Chevron is a clear leader in financial returns in the Permian with our unique royalty advantage and strong execution across a diverse portfolio,” said CEO Mike Wirth, according to a transcript. “We have strong momentum and expect to achieve 1 million barrels of oil equivalent per day in 2025.”

During a Feb. 2 call with investors, Exxon Chief Financial Officer Kathy Mikells reported, according to prepared remarks that the company produced about 610,000 barrels of oil equivalent per day (boepd) in the Permian last year, exceeding its goal of 600,000 boep.

That came before Exxon Mobil completed its $63 billion acquisition of Pioneer Natural Resources announced last year, the report read, a move the company expected to double Exxon’s production in the region next year.

More:Here's the latest oil and gas drilling rig count in Permian Basin, New Mexico and Texas

“We’re leveraging our competitive advantages to efficiently develop and produce our largely contiguous-acreage resource,” Mikells said, according to a transcript of the presentation.

And with a growth of 5,000 barrels of oil per day expected in February, bringing the Permian Basin’s oil output to about 6 million bopd, according to the Energy Information Administration.

The growth in oil production came as oil prices held in the mid $70s a barrel, with the Chicago Mercantile Exchange reported domestic oil trading at $72 a barrel Monday morning.

More:Gov. Lujan Grisham wants New Mexico to spend big. Should oil and gas foot the bill?

The price of oil tumbled at the start of February from about $78 reported Jan. 30 but was holding above the $70 a barrel mark that started off the year.

A report from Enverus showed companies were targeting the Permian Basin more than any other region to take advantage of the higher oil prices and capitalize on growth.

This led to $103 billion in mergers and acquisitions (M&A) transacted last year in the region, the report read.

“The Permian was a juggernaut for deals in 2023, both for private sales and corporate M&A,” said Senior Vice President Andrew Dittmar. “Buyers increasingly showed a willingness to pay whatever it took to boost their footprint in this critical play, and prices for future drilling inventory climbed to new highs.”

Read the latest issue of the OGV Energy magazine HERE