The collapse of oil prices has ground shale drilling to a halt, but the one region where drilling is still active, and even increasing, is in West Texas.
The Permian Basin is one of the last profitable areas to still drill with sub-$50 oil, and as other regions fall by the wayside, an increasing portion of drilling activity and spare investment dollars are flowing into the Permian. The rebound in the rig count in the U.S. is largely concentrated in the Permian. The West Texas shale basin has captured two-thirds of the 90 oil rigs that have been added since hitting a nadir in May.
On August 25, Blackstone Group announced its decision to inject $1 billion into Permian assets in a partnership with a Fort Worth-based affiliate of Jetta Operating Co. The companies are essentially creating a pure play company to target the Delaware Basin in the Permian, the latest vote of confidence for a region that is undergoing a resurgence.
The move comes after a handful of other billion-dollar deals targeting the Permian in just the past few weeks.
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