Skyrocketing West Texas Land Prices Have Oilmen Uneasy Properties in the oil-producing Permian Basin region are selling at huge prices despite crude slump

[IsailedawayfromFR]

Wall Street investors have fallen in love with properties in the Permian Basin, and that is making some West Texas oil men nervous.

Even though a barrel of oil commands half what it did two years ago, the price being paid by companies for drillable acres in the prolific oil field has shot up to never-before-seen levels. In recent weeks, some have paid upward of $40,000 an acre for drilling leases—about eight times what similar properties fetched two years ago, when oil prices were close to $100 a barrel.

Companies such as  Pioneer Natural Resources Co. and Occidental Petroleum Corp. have said their land in the Permian Basin, where there are layers of oil-bearing rock stacked on top of each other, holds substantial oil reserves that can be tapped in tandem, making each acre more valuable than in a typical oil field.
As others pile into the Permian, veterans of the region’s oil fevers worry that the current lease prices will set off another boom that will be quickly followed by an inevitable bust. The region has experienced booms before, notably in the early 1980s and again in 2008 and 2014, all of which were followed by busts.

“I think that [pricing] is absolutely ridiculous,” said Kenny Freeman, the vice president of sales at Petrosmith Manufacturing LLC of Abilene, Texas.


http://www.wsj.com/articles/skyrocketing-west-texas-land-prices-have-oilmen-uneasy-1477825204

This goes along with the recent news that companies will not be investing much in large, international projects, but developing already-discovered reserves. http://www.bloomberg.com/news/articles/2016-09-13/oil-industry-may-cut-spending-for-third-year-in-row-iea-says

So what does this say when capital projects are substantially reduced yet the largest oil basin in the US has exploding land prices?

Looks like companies are investing to stay at home for the future.

Good for America.

[Sanguine]

Interesting!

[XenaLee]

This goes along with the recent news that companies will not be investing much in large, international projects, but developing already-discovered reserves. http://www.bloomberg.com/news/articles/2016-09-13/oil-industry-may-cut-spending-for-third-year-in-row-iea-says

So what does this say when capital projects are substantially reduced yet the largest oil basin in the US has exploding land prices?

Looks like companies are investing to stay at home for the future.

Good for America.

I'm sure the Hillary leftist Democrats are working feverishly, as we speak, to squash that endeavor via yet more massive regulations on domestic oil exploration and drilling....since it's "good for America".  Can't have that.  Texas may yet reconsider that secession thingy with a Hillary Clinton presidency.

[IsailedawayfromFR]

  Texas may yet reconsider that secession thingy with a Hillary Clinton presidency.

A President Hillary would do anything to keep Texas from saying adios.

A number of states are certain to join it in leaving.

End of the liberal dream, as all that would be left would be blue states looking at each other to see who would fund the largesse they collectively created.