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Permian Resources Secures a Major Deal in the Thriving Delaware Basin
05/25/2023
Permian Resources bolsters dominance in the Delaware Basin with strategic land acquisitions, expanding its portfolio by over 5,000 net leasehold acres and 3,000 royalty acres.
In a stunning display of growth and strategic maneuvering, Permian Resources Corp., based in Midland, Texas, has made waves in the first quarter by securing a series of deals worth over $200 million in the highly sought-after Delaware Basin. This move solidifies their position as a player in the region.
One of the highlights of Permian Resources' quarter was the acquisition of a substantial 4,000 net acres, comprising 3,300 net royalty acres with an average net production of 1,100 barrels of oil equivalent per day (boe/d). This bold move cements its foothold in the energy landscape, bolstering its portfolio with promising assets and strengthening its overall market position.
What we already know
Permian Resources recently announced a major transaction, adding to its already substantial acreage in Lea County. The company successfully executed a strategic acreage trade during the first quarter 2023. This trade involved:
- Approximately 3,400 net acres in Eddy County, New Mexico.
- About 3,200 net acres of lower working interest acreage.
- Among these transactions were grassroots acquisitions that resulted in an impressive addition of approximately 530 net acres to Permian Resources' portfolio. The company secured around 20 net royalty acres, further strengthening its position in the market.
- Permian Resources didn't limit its transactions solely to upstream activities and made divestments in its saltwater disposal wells and the corresponding produced water infrastructure located in Reeves County, Texas.
Co-CEO James Walter enthusiastically shared the impact of this trade during a recent analyst call, stating, "This trade significantly enhances our working interest in high-return locations and paves the way for the creation of several newly operated drilling units." He further revealed that development activity is expected to commence in about half of the inbound acres over the next 12 months. Such a transaction promises remarkable growth and value for shareholders, making it a highly accretive move.
Permian Resources demonstrated its commitment to expansion by executing over 45 transactions in the first quarter alone.
Path to A&D Success
Permian Resources, the result of a successful merger between Colgate Energy Partners II LLC and Centennial Resource Development Inc., has emerged as the pure-play E&P company in the Delaware Basin. With a strategic focus on efficiency and cost reduction, the company has achieved remarkable progress since its inception a year ago.
Permian Resources portfolio of mineral and royalty interests in the Permian’s Delaware Basin.
Co-CEO Will Hickey highlighted the achievements resulting from the combination and integration process, emphasizing significant operating cost reductions, improvements in drilling and completion costs, and overall operational efficiencies. This commitment to excellence is a testament to the talented team driving Permian Resources' success.
Looking ahead, Hickey expressed the company's determination to enhance capital efficiency further and reduce costs, enabling incremental free cash flow that can be returned to shareholders. Permian Resources recognizes the importance of maximizing value for its investors and remains dedicated to identifying new opportunities for growth.
Notably, the company's royalty-focused entity is currently generating over $50 million of annual free cash flow, solidifying Permian Resources' position as a formidable player in the industry.
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Riley Permian Secures $330 Million Acquisition in Thriving New Mexico: A Strategic Move with Promising Returns
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