The global energy giant is trying to keep up with its big oil peers.
The Permian Basin is quickly becoming one of the best oil and gas resources in the entire world. As a result, energy companies have flocked to the region, spending billions of dollars to lock up drillable land. These purchases provided the buyers with significant resources, which should give them plenty of fuel to grow production at a fast pace over the next several years.
While Royal Dutch Shell (NYSE:RDS-A)(NYSE:RDS-B) owns a sizable position in the Permian, it lacks the same scale of rivals ExxonMobil (NYSE:XOM) and Chevron (NYSE:CVX), which expect the region to be a major growth driver. Because of that, the company is currently looking to make an acquisition to bulk up its Permian position so it can participate in that growth.
Drilling down into Shell’s foray into the Permian
Shell was one of the early buyers of Permian land as it scooped up more than 600,000 net acres from Chesapeake Energy for nearly $2 billion in 2012. As part of the deal, Shell inherited Anadarko Petroleum (NYSE:APC) as a 50-50 partner. While the two feuded in the past, they’ve since reconciled and are now working together to develop this acreage. Read more…