The Permian Basin: An Attractive Opportunity

by | Apr 4, 2017 | South Texas Oil Boom

The Permian Basin has become an attractive opportunity for oil and gas investors.  Besides the quality of oil found in this basin, the extraction cost from the beginning to the end all make it a go-to-area for investors who desire to invest in the energy sector.

Permian Basin starts from South of Lubbock, Texas and extends to South of Midland and Odessa and westward into the south eastern part of New Mexico. The greater Permian Basin comprises several component basins, the largest being the Midland Basin, followed by the Delaware Basin.

According to a report on CNBC,

“Along the Permian alone, the oil and gas industry poured more than $28 billion into land acquisitions in 2016, more than triple what was spent in 2015. These deals are setting the stage for much larger investments that will be needed to extract oil from the ground in coming quarters, many experts agree.”

The Motley Fool describes the Permian Basin as:

“one of the most prolific oil and gas producing regions in the country. The basin produced a prodigious 29 billion barrels of oil since output began in 1921. However, despite that rich production history, its best days could lie ahead. Thanks to new extraction techniques oil companies have finally figured out how to unlock the oil and gas trapped within its unique geology encompassing several stacked layers of hydrocarbon-bearing rock formations. Because of this, analysts at research firm Rystad Energy said last July that the “U.S. now holds more oil reserves than Saudi Arabia” thanks in part to the Permian. With so much oil potential, the Permian Basin is one of the top oil plays in the country, which has producers flocking to unlock its energy resources.”


TAX ADVANTAGES. Investing in oil and gas offers unique tax advantages not available anywhere else in the tax code.

PASSIVE INCOME. Many oil and gas wells will produce for decades, providing ongoing and consistent cash flow.

DIVERSIFICATION. Diversification is a wise move for any investor, and investing in oil and gas can provide above average returns.

MITIGATED RISK. Efficiency in oil and gas drilling thanks to new technologies minimize the risks of investment.

LOWER VOLATILITY. Oil & Gas is not as influenced by the up and downs of the stock market and interest rates.