Permian Basin gets hotter with Exxon

*Note: This article is prepared by a member of KE Andrews, an ad valorem tax and valuation company specializing in the energy industry, representing over 35% of all gas plants in the U.S. and over $40 billion in pipeline*

?The Permian Basin is exploding and has been for quite some time. Wednesday's news solidifies that thought further with Exxon more than doubling resources to 6 billion BOE in the Permian, and 3.4 billion BOE in the Delaware.

This is the latest move in the arms race into the West Texas basin. Exxon's thinking, would be to follow the movement and capitalization of companies such as Diamondback Energy, who continues to add to their portfolio with the latest 76,319 acre purchase in the Permian for a reported $2.5 billion. Looking at those staggering numbers, the land is selling at an absolute premium. What we see at KE Andrews, is a lot of times the appraiser in the district will try and increase the value of the subsequent property.

There is no question that the Permian and Bakken are the two hottest plays in the industry at the moment, and we will continue to see movement into both areas especially as Brent crude inches higher towards $60. This acquisition from Exxon firmly plants the idea that the big boys are coming back to the party. With the rig count at its highest number in 17 months, the time for E&P is now.