Big Oil is Making Big Moves in the Permian Basin
Exxon Mobil Corp. and Chevron Corp. have joined several other supermajors interested and making intrepid growth in the Permian Basin.
In the era of the shale revolution, there is now an insane amount of investment being pumped into the Texas land which had previously been territory for small companies, independents and wildcatters. This increased movement has many investors urging smaller companies to merge together to increase their scale in the increasingly-competitive space. However, while smaller companies' market values have seen devastating declines and changes in leadership, larger companies are remaining cautiously selective in their decisions as "many U.S. independents trade at higher price-to-earnings multiples than integrated oil companies according to data compiled by Bloomberg" (Crowley).
The Permian Basin will be host to oil production on a new, grander scale. With billions of dollars already used up in the exploration of the land, the pressure is on to be as efficient and consistent and arguably aggressive in production as possible.
The incredible scale to which these companies will be operating can just be barely imagined by the graphic below from Energy In Depth (an independent project of the Independent Petroleum Association of America). Exhibiting bright production prospects, the 15,000 feet of proven productive zone thickness in the Permian Basin dwarfs the Empire State Building in length 12 times; the graphic only depicts a depth of 12,500 feet!
With billions already used simply in exploration, the once humble West Texas Basin is now bustling with activity and further-magnified economic significance, worldwide.
Crowley, Kevin. "Permian Shale Primed for Mergers and Acquisitions." Rigzone. 11 March 2019, https://www.rigzone.com/news/wire/permian_shale_primed_for_mergers_and_acqusitions-11-mar-2019-158345-article/
The Economist. "The shale boom has made America the world's top oil producer." 20th October 2018, https://www.economist.com/business/2018/10/20/the-shale-boom-has-made-america-the-worlds-top-oil-producer.
Tang, Carol Marie. "Permian Basin." Encyclopædia Britannica. 25 May 2015, https://www.britannica.com/place/Permian-Basin.
Graphic obtained from, with all credit to, Energy in Depth.
Cover image obtained from, with all credit to, Patriot Energy.