O&G companies jump for Permian Basin opportunities

Oil and gas drilling and production has always been present in West Texas, but drilling, development, infrastructure -- and M&A -- activities are heating up across the Permian Basin as unconventional oil prospects and production increase.

US independent Laredo Petroleum acquired privately held, Permian Basin-focused Broad Oak Energy for $1 billion on Thursday. The merger, Laredo reported, will make the company "a leading player in the Wolfberry oil play," a complement to its established assets in the liquids-rich Granite Wash play.

In other billion-dollar Permian Basin deals, Concho Resources (NYSE:CXO) acquired Marbob Energy's Permian Basin assets in New Mexico for $1.65 billion in cash, focusing on the Bone Spring unconventional oil play it contained.

As a part of its efforts to divest assets to pay for the oil spill in the US Gulf of Mexico, BP (NYSE:BP) sold its Permian Basin assets to Apache (NYSE:APA) for $3.1 billion. The 10 fields are located in West Texas and New Mexico and represent daily average production in 2010 of 15,110 barrels of liquids and 81 million cubic feet of natural gas -- as well as myriad drilling opportunities.

Even super-major ExxonMobil (NYSE:XOM) is drilling in the Permian Basin, and onshore unconventional-focused US independent Devon Energy is also active in the Permian Basin.

In a surprise move, offshore-focused W&T Offshore (NYSE: WTI) diversified its assets with a $366 million West Texas Permian Basin acquisition.

Independent LINN Energy (Nasdaq:LINE) is also active in the region, recently spending more than $200 million to acquire Permian Basin assets within the Wolfberry trend. Junior player Blugrass Energy (OTC:BLUGE) has acquired acreage in Permian Basin it believes could hold up to 168 billion cubic feet of natural gas. Additionally, Energen Corporation (NYSE: EGN) is active in the Wolfberry, Bone Spring and Avalon Shale trends of the Permian Basin.

Other junior exploration and production companies, such as Lynden Energy, Berry Petroleum and Cross Border are active in the region.

In addition to drilling and development, millions of dollars of pipeline and processing infrastructure acquisitions, expansions and construction projects are currently ongoing to support the burgeoning oil, natural gas and liquids production from the region.

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Phaedra Friend Troy is the content director for PennEnergy.com, an all-energy website that provides oil and gas, power and infrastructure news, analysis, reports and more. Sign up for a free daily enewsletter today.