Latest news with #DelawareBasin
Yahoo
2 days ago
- Business
- Yahoo
Can Prairie Operating Co.'s Cost Leadership Set It Apart?
Prairie Operating Co. PROP is building its growth strategy around disciplined cost control, a focus that's quickly becoming one of its most important competitive advantages in the DJ Basin. The company has leaned into operational efficiencies across drilling, completion and production workflows, targeting scalable returns even at mid-cycle commodity prices. Its current one-rig development program emphasizes capital-light execution with a focus on short payback wells, allowing Prairie to maintain flexibility while still expanding volumes.A major contributor to this efficiency is Prairie Operating Co.'s vertical integration and hands-on supply management. The company is actively self-sourcing critical inputs like sand, water and chemicals, reducing exposure to third-party cost inflation and service delays. By deploying proprietary in-basin logistics, PROP minimizes transportation costs and keeps project timelines tight. The company's development model favors repeatable pad drilling, streamlining both capital intensity and cycle time, especially in its high-return Delaware Basin sets Prairie Operating Co. apart is not just what it spends, but how consistently it manages to do more with less. In an industry often shaped by unpredictable price cycles and rising service costs, Prairie's focus on margin preservation gives it breathing room. As the company scales through 2025, this cost structure offers a buffer against volatility and a platform for reinvestment. For investors and operators alike, Prairie's approach makes a strong case for capital efficiency as a long-term value driver. Oil production in Colorado's DJ Basin dates back to the 1970s, but activity has surged in recent years thanks to the involvement of major players like Chevron CVX and Civitas Resources CIVI. Both companies played a critical role in unlocking the basin's potential, bringing capital, technology, and scale to the region. However, Chevron and Civitas Resources have since turned their attention elsewhere, opening up a rare window of is now focused on high-return global assets and deeper Permian Basin exposure, while Civitas Resources has aggressively shifted its drilling inventory to the Permian, where it now controls over 1,200 locations. With Chevron expanding globally and Civitas Resources consolidating in other basins, competition in the DJ has cooled, leaving Prairie Operating Co. with the space to diversification by Chevron and Civitas Resources makes Prairie Operating Co.'s strategy especially compelling. With 157 permits and more than 586 gross locations, Prairie is carving out a meaningful position in a basin where consolidation has often commanded a premium. Shares of Prairie Operating Co. have lost 43% year to date. Image Source: Zacks Investment Research From a valuation standpoint, PROP trades at a forward price-to-sales ratio of 0.32, well below the sector average. Prairie Operating Co. carries a Value Score of B. Image Source: Zacks Investment Research The Zacks Consensus Estimate for 2025 and 2026 EPS has moved down 18% and 20%, respectively, in the past 30 days. Image Source: Zacks Investment Research The stock currently carries a Zacks Rank #3 (Hold).You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Chevron Corporation (CVX) : Free Stock Analysis Report Civitas Resources, Inc. (CIVI) : Free Stock Analysis Report Prairie Operating Co. (PROP) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Globe and Mail
6 days ago
- Business
- Globe and Mail
Chevron's Permian Wells Deliver More
Chevron Corporation 's CVX operations in the Permian Basin are showing strong results, and the company is doing it with less money. The energy supermajor expects its oil and gas production to witness a 5-6% CAGR through 2026, while cutting its reinvestment rate by about 20% compared to 2024. That means it's spending less but still getting more output. A big part of this success comes from better-performing wells in New Mexico's Delaware Basin, which now makes up 85% of its new development plans. In 2024, Chevron brought 244 company-operated wells online, including 90 in New Mexico. Those wells produced better than expected, helping to lower costs and increase returns. As a result, the company expects its free cash flow from the Permian to grow by nearly $2 billion by the end of 2026. And because a significant portion of Chevron's acreage in the area has little or no royalty payments, it keeps more of the revenues from each barrel it produces. This approach reflects Chevron's focus on doing more with less. Rather than chasing growth at any cost, the company is improving how wells are drilled, cutting down on waste, and choosing high-return areas. The Permian Basin continues to be a key part of Chevron's business, and by improving efficiency and lowering costs, the company is turning it into a reliable source of cash for the long term. A Word on Some Other Permian Operators ExxonMobil XOM, Chevron's primary competitor, has aggressively ramped up its Permian presence through acquisitions, most notably its $63 billion buyout of Pioneer Natural Resources in 2024. This move expanded ExxonMobil's footprint to more than 1.3 million net acres and significantly boosted output. In 2024, ExxonMobil's Permian production averaged 1.185 million BOE/d, up 570,000 from the prior year. The company plans to double that to 2.3 million BOE/d by 2030. To get there, it's using advanced methods like special proppants and cube drilling, and it aims to cut emissions to net zero in its original Permian operations by 2030 and in Pioneer's by 2035. Another energy biggie, EOG Resources EOG, holds a dominant position in the Delaware Basin, utilizing advanced drilling techniques to maximize well productivity and returns. In 2024, EOG Resources' Permian assets drove 3% oil production growth and an 8% increase in total volumes. By leveraging proprietary technology and self-sourced materials, EOG Resources maintains a breakeven price in the low-$50s, ensuring consistent free cash flow and attractive shareholder returns. CVX's Price Performance, Valuation and Estimates Shares of Chevron have lost around 5% in the past year. From a valuation standpoint, Chevron's forward 12-month P/E multiple stands at almost 19X, well above the subindustry. CVX carries a Value Score of D. The Zacks Consensus Estimate for Chevron's 2025 revenues implies a 6% decline year over year. The stock currently carries a Zacks Rank #5 (Strong Sell). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Zacks' Research Chief Names "Stock Most Likely to Double" Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest. This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%. Free: See Our Top Stock And 4 Runners Up Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Chevron Corporation (CVX): Free Stock Analysis Report Exxon Mobil Corporation (XOM): Free Stock Analysis Report EOG Resources, Inc. (EOG): Free Stock Analysis Report
Forbes
10-06-2025
- Business
- Forbes
News From New Mexico: A Cauldron Of Energy Uncertainty
Oil and gas production is one ingredient in New Mexico's cauldron of energy uncertainty, and it's a big one. This analysis points to several dilemmas, in recent news, that are simmering, and explains what may happen in the near future. 35% of New Mexico's revenue comes from oil and gas fields in the Delaware basin, part of the Permian basin that stretches into West Texas. Crude production exceeded 2 MMbopd (million barrels per day) in 2024, which was double that in 2019 before the Covid dropout in 2020. The entire Permian basin reached 6 MMbopd in 2024, about half of total U.S. crude production. But what will happen if the price of oil stays low? If the WTI price of oil stays at $63/barrel, Permian drilling of well inventory will last seven - ten years. This is better than three - four years for the Eagle Ford in East Texas, and the Bakken in North Dakota. But it illustrates one potential downside if the price of oil stays low. Another downside is a projection by Vicki Hollub, CEO of Occidental, who said crude production in the Permian could peak by next year, due to cutbacks in capital spending. Oil and gas production is one ingredient in the cauldron of uncertainties because 35% of New Mexico's revenue comes from the Delaware basin. Another ingredient is that oil and gas globally produces about 50% of greenhouse gases (GHG) that cause global warming. The oil and gas industry is responsible for the largest fraction of emissions in New Mexico at 41%. Although there is a growing industry of renewable energies in New Mexico, and lots of government support, the revenue from this will never replace the revenue from oil and gas. Another dilemma faced by New Mexico is the enormous volume of water that flows to the surface along with oil and gas—so called produced water. 2 billion barrels or 84 billion gallons are produced each year. Right now, this water is left in evaporation ponds, or disposed of in injected wells, or recycled and cleaned to be used in the next frac job. Disposal by deep injection is problematic because it has created earthquakes of magnitude 5, although this has been more of an issue in West Texas. The dilemma is exacerbated because the Permian basin is largely a desert, and New Mexico is in a drought—some say a 20-year drought. A solution that cries out loud is to purify the produced water enough that it can be used in agriculture, or perhaps even drinking water. There are a range of systems from multi-stage filtration up to commercial desalination that can be used, but to achieve the required purification would be costly. Twelve pilot projects are underway to test the effects of treated water on agriculture and manufacturing. But the New Mexico Water Quality Control Commission stepped in last month to prohibit the next step—discharge of treated water to ground or streams. The Commission fears that chemicals still in treated produced water will be toxic, but there are no regulations governing their use. As well as water treatment, the state would need to oversee storage, transport, and disposal of the water. Although there are no regulations for this, NMED (New Mexico Environmental Department) plans to use results from the pilot projects to design new standards, technical and operational, that would allow re-use of produced water to help resolve the fresh water problem in New Mexico. Chaco Canyon was a central gathering place of Indian tribes around 1100 A.D. Eight man-made roads extended radially outwards, some for 50 miles or so. The large collection of ruins at Chaco include separate multi-story buildings and many circular kivas, underground religious centers. Carvings in sheltered sandstone clefts and alignment of structural walls reveal native knowledge of yearly seasons of the sun and moon. Chaco Canyon lies in the San Juan basin, once the largest gas basin in the U.S. Chaco has been simmering in the New Mexico cauldron for a number of years. In 2023, Secretary of the Interior, Deb Haaland issued an order to restrict drilling or development of oil and gas operations to outside a 10-mile radius around Chaco. This was to enlarge the area of protection around Chaco Canyon, which is sacred to many Indian tribes. But not all tribes, as the Navajo Tribe did not live in the region until hundreds of years after 1100 A.D. The details of this issue have been spelled out separately. Chaco sits close to the southern edge of the oily window of the San Juan basin. In 2023, the Navajo Nation had wanted to specify a smaller radius of 5 miles, because some members owned mineral rights to some of the land around Chaco. They filed a lawsuit against the Interior Department and BLM (Bureau of Land Management) in January of 2025, arguing to revoke the 10-mile limit because it harmed the profits of lessees who were economically small operators. Into the breach has stepped the Trump administration. New Interior Secretary, Doug Burgum, has told the BLM to reconsider the 10-mile limit. The All Pueblo Council of Governors has resisted this, but not the Navajo Nation. Given the Trump government's directive to revise or rescind actions that are an 'undue burden on the development of domestic energy resources', it's hard to see the BLM keeping the 10-mile protective limit at Chaco. New Mexico was a hotspot of uranium mining back in the 1950s and 1960s when the cold war was at its height. Over 1,000 uranium mines came into existence, many that employed miners from the Navajo Nation. The uranium was bought by the U.S. government to be used for nuclear defense purposes. Church Rock just outside Gallup was an active mining site, and the scene of a bad flood that polluted the Rio Puerco in 1979—the largest-ever radiation accident in the U.S. The health effects of mining, notably lung disease due to radon gas attached to mining dust, is a dark chapter in the history of mining. Lack of epidemiological studies and government bureaucracy delayed cleanup efforts for surface tailings radiation, and underground contamination of aquifers. The U.S. Congress eventually passed RECA, an act that provided reparations to people affected by uranium mining and by nuclear tests in Nevada. The law was due to expire in June 2024, but the Senate passed a bill to extend it by six years. However, the House never brought it to a vote, so the law has expired. Under RECA, the government has paid claims of 41,000 people, and paid $2.6 billion in reparations, the majority to recipients from the Nevada nuclear testing site. The Inflation Reduction Act of 2022 opened a door to nuclear power as an alternative energy source, to the tune of $30 billion. This would include reopening of old mines, many of which lie on Native land, as well as new mines. The Trump government appears to have taken another giant step toward uranium mining by another new executive order on May 23 that prioritized nuclear fission reactors, traditional and SMRs (small modular reactors). This was ostensibly to provide burgeoning new electricity needed for U.S. data centers. According to the Secretary of Energy, 'Nuclear has the potential to be America's greatest source of energy addition. It works whether the wind is blowing, or the sun is shining, is possible anywhere and at different scales.' Given the state's history, a lot of tension will arise if uranium mining is allowed to resume in New Mexico. Untrammeled growth of uranium mining and nuclear generation of electricity may ignite a spark to the ever-present fear of radioactivity in mining and disposal of nuclear waste, which are always simmering in the New Mexico cauldron of uncertainty.
Yahoo
04-06-2025
- Business
- Yahoo
ONEOK buys remaining stake in Delaware Basin JV for $940m
Natural gas transmission company ONEOK has acquired the remaining 49.9% interest in the Delaware Basin joint venture (JV) from NGP XI Midstream Holdings for $940m. The deal, which includes $530m in cash and $410m in ONEOK common stock, positions ONEOK as the sole owner of the JV. The Delaware Basin JV boasts a processing capacity of more than 700 million cubic feet per day in the Delaware Basin across west Texas and New Mexico. ONEOK provides fractionation, gathering, marine export, processing, storage and transportation services. With a network of approximately 60,000 miles of pipelines, ONEOK plays a crucial role in transporting natural gas, natural gas liquids (NGLs), refined products and crude oil, catering to both domestic and international energy demand. The acquisition comes after recent strategic moves by ONEOK, including the formation of JVs with MPLX in February to develop a large-scale liquefied petroleum gas (LPG) export terminal in Texas City and a connecting pipeline. These ventures involve the construction of a new 400,000 barrel per day (bpd) LPG export terminal and a 24in pipeline from ONEOK's Mont Belvieu storage facility to the terminal. Earlier this year, ONEOK concluded the sale of its three interstate natural gas pipeline systems to DT Midstream for $1.2bn in cash. ONEOK reported a net income of $691m for the first quarter ended 31 March 2025, compared with $639m in the same period last year. In January this year, ONEOK completed its acquisition of Dallas-headquartered EnLink Midstream, a provider of integrated midstream infrastructure services for natural gas, crude oil and NGLs, as well as CO₂ transportation for carbon capture and sequestration. "ONEOK buys remaining stake in Delaware Basin JV for $940m" was originally created and published by Offshore Technology, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
20-05-2025
- Business
- Yahoo
Five Point Infrastructure exploring $2bn sale of Northwind Midstream
Five Point Infrastructure, the private equity owner of Northwind Midstream, is reportedly considering a sale of the Permian Basin gas infrastructure operator, valuing the company at more than $2bn including debt, reported Reuters, citing sources. The sale process is being managed with the assistance of investment bankers from Piper Sandler. Currently in its initial stages, the outreach to potential buyers has begun, with interest anticipated from both midstream companies and other private equity and infrastructure funds. Despite the ongoing discussions, sources, who requested anonymity due to the private nature of the deliberations, have indicated that there is no certainty that a deal will be finalised and that the final valuation may vary, the report said. Five Point has not provided any comments on the matter. Similarly, there has been no response from Northwind or Piper Sandler regarding requests for comment. Established by Five Point in 2022, Northwind Midstream has since developed a network of pipelines, compressor stations and a treatment facility, primarily located in the northern Delaware Basin in New Mexico. The company specialises in the transportation and processing of acid gas, a type of natural gas with high levels of hydrogen sulphide and carbon dioxide, which must be removed before the gas can be commercially utilised. The potential sale of Northwind Midstream is reflective of a broader trend where private equity firms are looking to divest energy infrastructure assets. These assets have been built up over recent years to support increasing production from US shale fields. For instance, NGP Energy Capital Management successfully sold Outrigger Energy II to Kinder Morgan in February for $640m, and Morgan Stanley Energy Partners is currently seeking a buyer for a majority stake in Brazos Midstream II, with an estimated value of around $2bn. In March 2025, Northwind Midstream announced the completion of a $700m senior secured first lien term loan issuance. The company intends to utilise the proceeds from this term loan to refinance existing debt and enhance its gas gathering, compression, treating, sequestration and processing system in Lea County, New Mexico, US. "Five Point Infrastructure exploring $2bn sale of Northwind Midstream" was originally created and published by Offshore Technology, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
