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Bloomberg
An upbeat shale patch, much to OPEC’s dismay, is hiring and ready to drill for more oil as producers are comfortably making a profit. But you have to be big if you’re competing in America’s prime spots.
The vast majority of explorers surveyed for a Federal Reserve Bank of Dallas report said they could profitably drill a new well at current prices. More than half are increasing headcount.
The outlook for small oil and gas companies in the Permian Basin, however, is “dismal†unless benchmark prices stabilize at $70 a barrel or higher, according to the study.
The Permian, covering a vast area of West Texas and New Mexico, has become one of the world’s hottest oil exploration areas, luring billions of dollars of investment from giants like Exxon Mobil Corp and sending acreage prices skyrocketing.
As competition there heats up, Concho Resources Inc. is paying as much as $8 billion for rival RSP Permian Inc. to create the basin’s biggest producer.