By Mitch Borden
Chevron, one of the largest oil companies in the world, recently bought Anadarko Petroleum for about $50 Billion. The acquisition expands Chevron’s holdings in the Permian Basin by about 240,000 acres. This deal perked up the ears of some industry professionals and has people wondering if other large acquisitions are on the horizon.
Rob Thummel is a Senior Portfolio Manager at Tortoise Capital Advisors which is an investment firm that focuses on the energy sector. He believes it's very possible the Permian Basin could start seeing major oil companies buy up local operations as they begin to expand more into the region.
Thummel said, "Do we expect a bunch of 50 billion acquisition? No. But could we see several, you know, 10, 20, 30 billion dollar accusations? Potential and that could happen over the next year."
West Texas companies, according to Thummel, like Pioneer Resources, Diamondback Energy, and Concho Resources could be attractive to larger companies. That’s because they own large swaths of land in the Permian Basin that could potentially produce oil for decades.
"It wasn’t that long ago that Exxon and Chevron really didn’t have any investment in the Permian," said Thummel.
Until the last few years, major companies didn’t focus many resources on fracking in the region. Now, they’re working to catch up by buying their way into the Permian Basin and consolidating smaller regional operators into their portfolios.
Thummel says Chevron’s acquisition of Anadarko shows major oil companies see the longterm potential of the Permian Basin’s oil industry.
