Yes, the Permian buys continue to move the needle. It looked like Noble Energy (NBL) would be hammered when it paid a gigantic premium for Clayton Williams (CWEI) over the weekend; the latter stock is up 37%, but more important, perhaps, is that the stock was at $7 a little less than a year ago and now it is at $143. What matters, though, is Clayton Williams has good Permian assets and Noble needs more Permian, where drilling costs can be anywhere from the mid-teens to the low $40s; either is profitable at these levels.
Then wonder of wonders, Exxon Mobil (XOM) at last pulls the trigger on the Permian, buying a ton of acreage from the Bass family for $5.6 billion. That's got Exxon going.
These transactions can cause still one more re-valuation of the group, which remains my favorite. Best names? Cimarex (XEC) , Concho Resources (CXO) , Pioneer Natural Resources (PXD) and Apache (APA) come to mind, the latter being an Action Alerts PLUS name and should be bought here aggressively.
The group is doing OK, with oil up 50 cents. Remember, these companies are going to be able to have production growth that Wall Street will like because of the Permian and remain the best stocks to own in the entire oil and gas market with the possible exception of Halliburton (HAL) and Action Alerts PLUS name Schlumberger (SLB) .
