Oil and Gas Investor Cover Story: Midland Basin’s Major Mojo

Consolidation, lower costs and better wells plus PUDs have regained value—all indicators point to the Midland Basin as the epicenter of renewed oil and gas activity.

(Source: Steve Toon / Oil and Gas Investor)

[Editor's note: A version of this story appears in the July 2021 issue of Oil and Gas Investor magazine.]

“Hands up! We’ve got you surrounded,” the marshal shouted out in the Old West. Today, acquisitive CEOs are shouting that in the Midland Basin. The flat, dry landscape hasn’t changed in decades, but what goes on underneath, and who controls that, surely has.

To assess the quality of the Midland Basin, one has only to look at the many recent transactions there, and to what extent public companies tout enormous returns. As operators push lateral lengths out further, yet wells get spaced further apart, companies do not have as much inventory in the Midland Basin as they once assumed, so they need to acquire more acreage.

If you look at area lease maps, Diamondback Energy Inc.’s acreage more or less surrounded all that of the companies it has acquired, QEP Resources Inc. and Guidon Operating LLC, in Martin County, Texas, and the so-called county line area bordering Andrews County, Texas. Done deal in March.

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Leslie Haines

Leslie Haines is executive editor-at-large for Oil and Gas Investor. One of the most respected oil and gas industry journalists in the business, she is celebrating more than 30 years at the magazine.