Permian Basin
The Permian's stacked pay and constant offset drilling make it one of the most valuable basins to own in, and one of the easiest to misvalue without the right data.
"The Permian" is really two distinct basins that get lumped together because they sit under the same stretch of West Texas and southeastern New Mexico. The Midland Basin, on the eastern side, has a long history of vertical drilling going back decades before operators shifted to horizontal development in its stacked shale intervals. The Delaware Basin, to the west, is generally deeper, with thicker and more numerous stacked intervals and higher reservoir pressures. Well costs, typical lateral lengths, and which zones get targeted first all differ between the two. A tract in the Midland and a tract in the Delaware can look similar on a map and still carry very different value, which is why a Permian evaluation needs to know which sub-basin, and often which county, it's working in.
What sets the Permian apart from most other U.S. basins is the number of economic target zones stacked under a single piece of acreage. The Wolfcamp, Spraberry, and Bone Spring intervals, along with the combined Wolfbone play where the Bone Spring and Wolfcamp are developed together, can each support their own generation of horizontal wells at different depths under the same surface location. Operators have also pushed lateral lengths further over time. Two-mile laterals are now about average across much of the basin, some run up to four miles, and operators have begun drilling U-turn (horseshoe) wells that curve back on themselves to unlock better economics on single-mile prospects. Longer and smarter laterals change both the capital efficiency of new wells and the number of wells a given tract can ultimately support. For a mineral or royalty owner, this means the producing wells you can see on a check stub may represent only one or two of several zones an operator still plans to develop.
In a basin where a large share of the ultimate value sits in locations that haven't been drilled yet, what's happening on the sections around your tract matters as much as what's already producing on it. Permits, rig moves, and completions on offset acreage are the clearest signal of what an operator intends to do next, and how soon. A tract surrounded by active permitting and recent completions is being told, by the market, that it's next in line. A tract with no nearby activity for several years may simply be lower on an operator's list, regardless of how strong the geology looks on paper. An evaluation that only accounts for existing production and ignores the pattern of offset development around a tract will consistently understate, or overstate, what the minerals are worth.
Because so much Permian value is forward-looking, owners and investors need more than a multiple of the last royalty check to make a good decision. Before selling, it helps to know how many remaining locations by zone are reasonably attributable to your tract, what pace of development is realistic given offset activity, and how your specific net revenue interest and lease terms affect what you actually collect. Before buying, the same questions apply in reverse, along with a clear view of operator quality, since who operates the acreage and how efficiently they drill and complete wells has a real effect on timing and recovery. A number without that reasoning behind it is just a guess dressed up as an offer. For a broader look at how mineral value is built from decline analysis, remaining upside, and lease terms, see our overview of mineral rights valuation.
Capturing Permian upside accurately means building type curves by target zone from public production and completion data, mapping remaining locations against current permits and rig activity, and applying your specific net revenue interest and lease terms to the result. I build these evaluations in ComboCurve, the same industry-standard software used to underwrite Permian acquisitions across the basin, so the cash flow projection and present value you receive reflect the same rigor used on the buy side. If you also want a closer look at how remaining reserves are quantified well by well, our reserves estimation page walks through that process in more detail. Whether you're evaluating a Midland Basin royalty interest, a Delaware Basin working interest, or a tract you're not sure how to categorize yet, the goal is the same: a defensible number, and the reasoning behind it, before you make a decision you can't undo.
By County
Delaware Basin stacked pay, gas and NGL rich, water-heavy.
Delaware Basin, heavily drilled, gas takeaway and water economics.
Midland Basin, oilier and shallower, lower produced water.
Core Midland Basin, oil-rich, frequent buyer offers.
New Mexico Delaware, federal land and permit-driven pace.
New Mexico Delaware and shelf, deep legacy history.
Common Questions
The Permian has multiple stacked, economic target zones under a single tract, so the same acreage can support several generations of horizontal wells at different depths. That stacked pay, combined with the pace of offset drilling, means Permian mineral value often depends as much on what hasn't been drilled yet as on the wells already producing.
The Midland Basin, on the eastern side of the Permian, is generally shallower with a long history of vertical development before the shift to horizontals, while the Delaware Basin, to the west, tends to be deeper with thicker, more stacked intervals and higher pressures. Well costs, typical lateral lengths, and the specific zones being targeted differ between the two, which changes how an evaluation should be built for a given tract.
Because so much Permian value sits in undrilled locations rather than existing production, permits, rig activity, and completions on neighboring sections are strong signals of what an operator plans to do on your tract next. An evaluation that ignores offset activity will miss a large part of what the minerals are actually worth.
I build type curves by target zone from public production and completion data, layer in your specific net revenue interest and lease terms, and map remaining locations against offset permits and rig activity. ComboCurve then generates the cash flow projection and present value, the same approach used to underwrite acquisitions across the basin.
Send over the county and section, a royalty statement, or an offer, and I'll tell you what a fair value looks like given the stacked pay and offset activity around your tract.
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