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Wall Street investors have fallen in love with properties in the Permian Basin, and that is making some West Texas oil men nervous. Even though a barrel of oil commands half what it did two years ago, the price being paid by companies for drillable acres in the prolific oil field has shot up to never-before-seen levels. In recent weeks, some have paid upward of $40,000 an acre for drilling leases—about eight times what similar properties fetched two years ago, when oil prices were close to $100 a barrel. Companies such as  Pioneer Natural Resources Co. and Occidental Petroleum Corp. have said their land in the Permian Basin, where there are layers of oil-bearing rock stacked on top of each other, holds substantial oil reserves that can be tapped in tandem, making each acre more valuable than in a typical oil field. As others pile into the Permian, veterans of the region’s oil fevers worry that the current lease prices will set off another boom that will be quickly followed by an inevitable bust. The region has experienced booms before, notably in the early 1980s and again in 2008 and 2014, all of which were followed by busts.

Skyrocketing West Texas Land Prices Have Oilmen Uneasy - WSJ

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