Oil and gas companies moving into Permian Basin in $100M string of deals, as region expands


Permian Resources Corporation announced an agreement that will see it purchase about 4,000 leasehold acres and 3,300 royalty acres, mostly in Lea County for $98 million.

The lands were estimated to produce about 1,100 barrels of oil equivalent per day, at 73 percent oil, according to a company announcement.

The price reflected about $8,000 per leasehold acre and $7,000 per royalty acre, the release read, including operated and non-operated assets the company said it could include in future trading.

James Walter, co-chief executive officer at Permian Resources said the move was part of a broader effort by the company to manage its portfolio and shift its footprint to areas of the basin expected to bring higher production and revenue returns.

He said the deal included 45 operated locations and was expected to generate about $100 million in net cash proceeds.

The company also planned to divest in oil and gas properties on the Texas side of the basin in Reeves County, Texas, along the New Mexico border.

About 3,500 net leasehold acres were planned for sale for $60 million with about 1,800 barrels of oil equivalent per day at 44 percent oil, representing “the substantial majority,” the announcement read, of the company’s Texas assets.

Permian Resources also said it sold about 300 acres of non-operated leaseholds in Eddy County, at about $35,000 per acre and expected that deal to total about $10 million in proceeds.

“At Permian Resources, we believe our focus on portfolio management will continue to drive value for our shareholders,” Walter said in a statement.

International companies also showed interest recently in the Permian Basin, as Swiss international energy company Vitol’s U.S. upstream company VPX Energy Partners announced it plan to acquire Delaware Basin Resources (DBR), and its associated extraction and water infrastructure.

The sale included 35,000 net leasehold acres, and 46,000 surface acres in Reeves and Pecos counties in Texas within the Permian’s western Delaware sub-basin, with the company reporting production of about 40,000 barrels of oil equivalent per day.

VPX CEO Gene Shepherd said the acquisition will allow the company to target the southern region of one of the most productive oil plays in the U.S.

“The opportunity to go back to work in the southern Delaware Basin, combined with the opportunity to do so with the DBR asset base and team is very exciting,” Sheperd said. “With Vitol’s unique market insights, expertise and funding capabilities, we expect this transaction will serve as the foundation for growing a highly profitable US lower 48 focused upstream business over the next decade.”

Ben Marshall, Vitol head of Americas said the deal would help position the company to take advantage of the U.S. and Permian Basin’s growing role in supply fossil fuels to the rest of the world.

“We are pleased to announce the addition of DBR and its related businesses to our US upstream portfolio,” he said. “As we have said before, we are eager to continue growing our position in the US Lower 48 as we anticipate US oil to remain an important source of supply to global energy balances.”

The region’s oil production was expected to see more growth in the next month, as the Energy Information Administration (EIA) forecast the Permian would produce about 5.65 barrels of oil a day (bpd)in February, growing by 30,000 bpd from January.

The basin was also expected to increase natural gas production next month, rising by 466 million cubic feet per day in February to a total of 21.7 billion cubic feet per day, making the region the second-largest gas-producing basin in the U.S., according to the EIA report.