Noble and the Permian Basin: Is It Still a Hot Favorite in 2017?



Key Permian player

According to Noble Energy’s (NBL) press release to announce its acquisition of Clayton Williams Energy (CWEI), NBL will hold the second-largest Southern Delaware Basin acreage position once the deal closes. The Delaware Basin is a subbasin in the Permian Basin.

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Permian Basin: An oil and gas favorite

As we saw in a previous series, the Permian Basin’s impressive production profile, low break-even costs, and high IRRs (internal rate of return) have caused producers to scramble to get their slice of the pie. In August 2016, Pioneer Natural Resources (PXD) acquired 28,000 acres in the Midland Basin from Devon Energy (DVN).

In early September 2016, Apache (APA), a key Permian player, announced a new oil and gas discovery, the Alpine High. Then, in late October, Occidental Petroleum (OXY) acquired interests in the Permian Basin from an undisclosed seller. On November 21, 2016, Concho Resources (CXO) announced that it would be acquiring approximately 24,000 gross acres in the Northern Delaware Basin.

On January 9, 2017, NBL added approximately 7,200 net acres to its Southern Delaware Basin position. The name of the seller wasn’t specified.

It looks like the Permian will continue to see a lot of interest this year, given NBL’s recent acquisition of CWEI. Strengthening oil prices (USO) could also be a factor.

Another key deal that was announced this year was Anadarko Petroleum’s (APC) $2.3 billion Eagle Ford sale to Sanchez Energy (SN) and Blackstone Group.


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