Every pundit worth a podium presentation insists consolidation is essential to reduce redundant cost and increase capital efficiency in oil and gas. But few acknowledge the persistent resilience of smaller operators who compete effectively against deeper-pocketed, publicly held peers.

In fact, innovation is a common characteristic for nimble smaller firms, who create value in overlooked areas by extending existing plays into new areas. Scala Energy LLC and Admiral Permian Resources LLC have done this in the western Delaware Basin, as has Discovery Natural Resources LLC in the southern Midland Basin. Or, they can expand a play’s Tier I economic core through superior execution, as has Caza Petroleum Inc. in New Mexico’s northern Delaware Basin.

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