Osl0-based research firm Rystad Energy said last week drilling rights in the Permian Basin averaged about $24,000 per acre in recent transactions – down 67 percent from 2018. And across U.S. shale plays, the average price has declined to about $5,000 per acre compared to $17,000 two years ago. Bloomberg said that “the plunge in acreage prices is a sign of the crisis facing U.S. oil and gas explorers, who are grappling with a pandemic-driven slide in crude demand… Large, financially stable producers are gobbling up smaller peers amid a wave of takeovers.” Rystad analyst Alisa Lukash added, “Low equity prices and the need for investor support (are) motivating many operators to look for new options to merge… We do not foresee demand for (oil) assets rising in the coming quarters.”
The Rystad report released Nov. 12 said some oil and gas acreage remains more valuable, including Delaware ($30,000 per acre) and Midland ($17,000 per acre) basins in west Texas.
Bloomberg said drilling rights of Permian-focused Concho were about $10,471 per acre in its proposed ConocoPhillips takeover announced last month – compared to $75,504 per acre for Concho’s purchase of RSP Permian in 2018.