Smaller Oil Firms Pay Top Dollar for Permian Land as Larger Players Cash Out

Large oil companies are racing to sell land in the largest U.S. shale formation as rising crude prices present them with a golden opportunity to jettison unwanted acreage and meet shareholder demands to lower costs, people involved with transactions told Reuters.

Worldwide oil demand rebounded faster than expected in 2021, boosting prices to more than $80/bbl. Output has also bounced back in the Permian, the pillar of U.S. oil production, based in Texas and New Mexico, where buyers are paying for land at lofty values not seen in three years.

The flurry of purchases kicked into high gear with big sales from Royal Dutch Shell, which sold its Permian assets for $9.5 billion in September, and followed with last week’s land sale by Pioneer Natural Resources to Continental Resources for $3.25 billion.