The Permian continues to steal the spotlight, garnering more M&A deal activity than any other area within the US Lower 48. Very few deals in recent years have centred around Glasscock County, but there have been three deals in Q3 2016 alone — the latest being Parsley Energy's acquisition of 9,000-plus undeveloped net acres. Our analysts examine the deal in this week's report, and discuss the Permian's broader M&A activity in our Crude for Thought podcast.
Parsley Energy has agreed to pay US$400 million in cash to acquire 9,140 undeveloped net acres in Glasscock County, Texas. The surrounding acreage has seen limited horizontal drilling, with just 15 wells drilled.
At nearly US$44,000 per acre, not valuing the minimal flowing production, Parsley has paid more than three times what Laredo paid for the same net acreage in July; however, Parsley also acquired associated royalty interests, and Laredo's acquired acreage included rights to the Spraberry only. Had Laredo's deal acquired Spraberry and Wolfcamp A and B benches, it would have paid at least US$25,000 per acre.
In a recent Crude for Thought podcast, US Lower 48 upstream research analysts R.T. Dukes and Benjamin Shattuck discuss how recent M&A activity has been heating up in the Permian.
Read more: entrances, exits, and rising rig counts
You can purchase our full US Upstream Week In Brief on demand to read this week's top stories in the North America Upstream sector, including Concho's recent expansion in the Midland Basin; Chesapeake's exit from the Barnett; how the Permian Basin drove the biggest weekly increase in US rig count; and our latest "wells to watch."
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