Why Are Land Buyers Stampeding Into Texas Oil Patch?
According to Wall Street Journal, the rush to Permian Basin is sign that long-awaited recovery in oil and gas prices may be near. In some cases, Permian drilling properties are fetching prices that exceed those paid when oil prices were above $100 a barrel two years ago! The competition for these deals is really at a fever pitch. Half of the $25.5 billion that has been paid this year for U.S. onshore drilling properties has been spent in the Permian Basin. So why are investors stampeding to the Permian? What do they see at Texas Oil Patch that we are missing?
Check Out Some Of Last Month’s Avid Land Buyers:
- Blackstone Group LP said Thursday that it has agreed to invest $1.5 billion in a pair of drilling deals at the Texas Oil Patch. The firm also committed $500 million more to another group of experienced oilmen who had purchased 16,000 acres about 100 miles to the northeast, in another section of the region’s red-hot Permian Basin.“It looks like we’ve come out of the trough portion of the cycle for the oil-and-gas sector and are on the road to recovery, though the road will likely be winding and it will take some time to get there,” said Angelo Acconcia, who oversees Blackstone’s oil and gas investing.
- It took Concho Resources Inc. and Parsley Energy Inc., two companies that drill only in the Permian, about four hours each to sell a combined $1.6 billion worth of new stock early last week to pay for deals they made to boost their share of the region’s shale.
- On Tuesday, PDC Energy Inc., which has drilling operations in the Appalachian and Rocky Mountains, said it had agreed to buy $1.5 billion worth of Permian fields from a New York investment firm.
What do Investors See That We Are Missing?
Roughly half of the $25.5 billion that has been paid this year for U.S. onshore drilling properties has been spent in the Permian Basin Texas Oil Patch, according to RBC Capital Markets. The Permian has attracted so many new entrants that the competition for these deals is really at a fever pitch.
Though some might find no actual benefit yet, this land frenzy clearly is giving up something we have not envisioned before. These Wall street guys are not stupid, if they are jumping massively into these deals is because they see a benefit coming from this action. At some point, they might share the belief that the oil downturn is over and drilling at this price level is not forever.
The Fact that drilling costs have come down by as much as half in the Permian as companies learn how to extract more oil from each well, often by drilling horizontally, and the expectation of a recovery in oil prices, is pushing investors and producers and has attracted many new entrants. These deals will eventually turn into more Permian Basin oil jobs, and this is when we fellow workers have to be prepared.
How Does This Sudden Interest In Texas Oil Patch Impact Oil Workers?
The state of Texas issued 631 drilling permits this July. Pipelines will be built, creating new welding jobs in Texas, refinery work is on the increase and the rigs are heading back out. An entry level job in the Oil Industry could see you earning just under six figures, even more, if you have experience in the sector.
Recently, multiple U.S. oil companies have announced their intentions to invest in Texas. New permits and rigs dispatched will open up an enormous amount of Texas Oil job opportunities. Start applying take an active role. Get excited, and get involved! Please Share this post.