Amid Oil Downturn, Fast Growing Permian Resources Still Shines
An iconic "nodding donkey" pumps in the Permian Basin.
It's a tough time to be in the oil business. Prices are down 15% in the past year to $67/bbl as OPEC decided to abandon supply cuts and allow member countries to boost output. Forget drill, baby, drill; at current prices America's drillers have been mothballing rigs at a rapid clip to preserve capital.
Among the 93 oil and gas companies in the Forbes Global 2000, more than half dropped in the rankings this year. Saudi Aramco, the biggest of Big Oil, slipped just one spot to no. 4. BP (in the midst of yet another corporate realignment) plunged 374 spots to no. 421.
Refiners and chemical producers have felt the pain as well, with PBF Energy, HF Sinclair, Formosa Chemicals and Neste all down hundreds of spots in the rankings.
And yet there are bright spots. Argentina's oil champion YPF advanced 478 spots to no. 702 thanks to economic revitalization wrought by President Javier Milei and its work to commercialize the Vaca Muerta gas field via a new JV with Italy's Eni.
New entrants to the Forbes Global 2000 include Brazil's biggest independent oil company Prio, chaired by investor Nelson Tanure, which owns stakes in big offshore fields. Also TechnipFMC, which specializes in building out complicated deepwater infrastructure, with big new contracts in Norway, Brazil and Nigeria. Then there's Venture Global, the liquefied natural gas giant with export megaprojects on the Gulf Coast. Venture's IPO early this year minted two new billionaires in co-founders Mike Sabel and Bob Pender.
The most inspirational new oil company on the list is Permian Resources, which debuts at no. 1762. Proving that you don't have to be old and grizzled to become an oil tycoon, Permian's co-ceos Will Hickey and James Walter are just 38 and 37 years old.
Childhood friends, Hickey worked at Pioneer Natural Resources and EnCap Investments, Walter at BCG and Denham Capital, before they joined forces in 2015 to meld together thousands of acres of private-equity-owned west Texas oilfields to form Colgate Energy. Through Colgate, the duo bought some 180,000 acres for $1 billion through 2022, then merged with Centennial Resources in a $7 billion deal. That led to the $4.5 billion acquisition of Earthstone Energy in 2023, the purchase of some $800 million of assets from Occidental in 2024 and a $600 million buy from the former Apache Corp. earlier this year.
After the rollup, Permian Resources is the largest pure-play oil company in the Delaware Basin (straddling the Texas/New Mexico border) with 450,000 net acres and 370,000 barrels per day of output.
Despite tough market conditions, Permian Resources generated $1.25 billion in net income on $5 billion of 2024 revenues. When shares tumbled with the market in early April the company bought back $43 million of stock at $10.52 a share. The share price has since bounced back to $14.25, giving Hickey and Walter each a fortune of $150 million.
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