(Bloomberg) -- Drilling rights in the US Permian Basin are commanding prices not seen since the worldwide pandemic crushed oil markets more than four years ago.
Occidental Petroleum Corp.’s $10.8 billion takeover of CrownRock LP equates to more $50,000 per acre for rights to drill some of the richest oil deposits in the hemisphere, according to data-analysis and research firm Enverus Inc. That’s approaching the $60,000 threshold Occidental reached in its blockbuster 2019 deal for Anadarko Petroleum Corp., the biggest deal of Chief Executive Officer Vicki Hollub’s tenure
Read More: Occidental Financing $10.8 Billion Deal Without Buffett’s Help
Occidental is acquiring CrownRock amid a broader, industrywide campaign by the biggest oil explorers to hoard top-notch drilling targets key to ensuring future output and cash-flow growth. More than a decade after shale-drilling innovations triggered a renaissance in Permian oil production, the inventory of the very highest-quality targets will be exhausted in roughly six years, according to Enverus.
ConocoPhillips and EOG Resources Inc. are prime candidates to execute the next round of takeovers, and one of the most-sought after targets is Endeavor Energy Resources LP, Enervus said. In the past two months alone, more than $120 billion in major US oil acquisitions have been announced, led by Exxon Mobil Corp.’s $60 billion bid for Pioneer Natural Resources Co.
©2023 Bloomberg L.P.