The two-year decline in global oil production didn’t stop Exxon Mobil from purchasing 275,000 acres in the Permian Basin – which spans from parts of west Texas to the southeastern part of New Mexico – last week. The $6.6 billion acquisition is the company’s largest deal in more than six years and signals a potential recovery for the U.S. oil industry.
Matt Smith, director of commodity research at Clipperdata, says that the Permian Basin is the highest-producing oilfield in the country, pumping out 2.15 million barrels of oil a day. Half of the 550 oil rigs in the U.S. are located in the Permian Basin.
“There really is this focus, sort of honing in, on the Permian because its attractiveness in terms of being able to access that oil,” Smith says. “The Permian is really where the growth is going to come from.”
What you’ll hear in this segment:
– Why the Permian Basin’s geology makes it so attractive
– What Exxon Mobil’s deal tells us about the future of domestic oil production
– Whether we’ve seen the last of low oil prices for the time being
Written by Molly Smith (no relation).