Clock ticking on Permian stranded assets
Reduced drilling activity over the past year is increasing the threat of premature write-downs in the basin
Consolidation in the Permian has bounced back, with $33.4bn in deals recorded since Q2 last year and many big names merging to leverage operational synergies. But while several operators have added substantial inventory, reduced drilling activity and cautious capex raise the risk of stranded acreage in the long term. The Permian rig count has doubled from its low point last year, when it slumped to less than 120. The stronger oil price has helped boost drilling activity, but in Q2 the count still averaged 175 fewer rigs than were recorded over Q1 last year—a 43pc deficit. Several of the biggest Permian independents merged with smaller shale competitors over the past pandemic year, adding acr

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