ExxonMobil Corp. (NYSE: XOM) tacked on 22,000 Permian Basin acres since May through acquisitions and trades, the company said Sept. 27—transactions ExxonMobil says adds to its reservoir of 6 billion barrels of oil equivalent (boe) in the Midland and Delaware basins.

ExxonMobil didn’t disclose terms of the transactions or the other parties involved in deals or acreage trades. However, the acreage pickup follows a trend of integrated oil majors speeding up divestitures and targeting higher-margin reservoirs, Moody’s Investors Service said in a September report.

“We continue to build on our strong position in the Permian,” said Jack Williams, ExxonMobil senior vice president. “Our leading presence in the Permian, from equity production through to Gulf Coast refining capacity, positions us well for the future.”

ExxonMobil said it is one of the most active operators in the Permian, where it operates 19 drilling rigs, including 14 that are drilling horizontal wells in the core Midland Basin. The company’s Midland inventory has added 200 wells since mid-2014 and has doubled its core operated acreage in the basin to more than 130,000 acres in the past few years.

In January 2017, ExxonMobil said it was acquiring about 250,000 Permian acres from the Fort Worth, Texas, Bass family in a $6.6 billion deal.

Moody’s expected the company will continue to lower its reserve replacement costs by efficiency improvements, lower oilfield services and drilling costs while focusing on lower cost shorter-cycle investments, including its large acreage position in the Permian Basin. The company’s total proved reserves could modestly decline in the next few years as the company prioritizes investment returns, shorter-cycle production response and free cash flow generation.

XTO Energy Inc., ExxonMobil’s subsidiary, holds at least 685,000 acres in New Mexico, according to its website. XTO manages the Bass family acquisition, which it says has an estimated resource of 3.4 Bboe in New Mexico's Delaware Basin.

ExxonMobil runs four rigs drilling horizontal wells in the Delaware Basin of New Mexico, where the company recently drilled its first 12,500-foot horizontal lateral length well, the company said.

Still, Moody’s credit analysis suggests that ExxonMobil’s concentration of core acreage is of minimal credit benefit to the company with one-third to two-thirds located of the acreage located in core areas.

“We expect companies to continue to focus on ‘high grading’ of their increased upstream portfolios and to prioritize returns on capital in the lower oil price environment,” Moody’s said in a Sept. 25 report.

Elena Nadtotchi, senior vice president at Moody’s, told Hart Energy in a Sept. 26 email that integrated companies are expected to use M&A to accelerate high-grading of portfolios.

“We expect companies to continue divesting assets with higher breakevens, while new production is bringing lower cost barrels,” she said. Larger companies will add selectively while looking for barrels with “strong economics” and competitive pricing.

Nearly all majors, apart from Total SA (NYSE: TOT), have sizeable positions in shale assets and have acquired and developed technology in those plays. In December 2015, for instance, Statoil ASA (NYSE: STO) and Repsol SA consolidated positions that are focused on improving assets from existing returns.

Statoil acquired a 13% interest in the Eagle Ford from Repsol to become the position’s sole operator.

However, Nadtotchi said that based on recent transactions integrated companies will likely remain on longer-term large reservoirs with strong economics, including via participation in new projects.

“Looking at the companies’ announced pipelines of new development projects, we also expect to see more gas than oil,” she said.

The Permian has been a major focus for E&P since 2016, with producers spending about $27 billion in the area through mid-2017.

Texas producers have primarily targeted Martin, Glasscock, Howard and Reagan counties in the Midland Basin and Reeves, Pecos and Ward counties in the Delaware Basin. Many of the acquisitions have been solely for undeveloped acreage.

Permian Acreage Acquisitions: April 2016–July 2017

Darren Barbee can be reached at dbarbee@hartenergy.com.