Great deal-price upside remains in the Permian Basin, which is the newest target of horizontal-well application to oil-rich resources, predicts Ward Polzin, managing director and head of A&D for Tudor, Pickering, Holt & Co. Securities Inc.

The potential for higher deal pricing may also remain in the Utica play in Ohio, he adds. Meanwhile, deal prices have peaked in the Eagle Ford liquids window and in the Bakken at current commodity prices, he says. Polzin addressed members of ADAM-Houston, an organization of E&P M&A professionals, Friday.

“What has not peaked? Upside definitely remains in the Permian…I have no doubt the Permian has a lot of room to go up over the next couple of years; $5,000 or $7,000 an acre may sound expensive to you today, but…if you look around and go to different basins, where else are you going to find all of this (potential for) horizontal applications in stacked pay?”

He notes too that the Permian Basin also has physical scale and few surface obstacles. “There’s a lot of room in Pecos County or Reeves County to drive trucks around and (access well sites). So the execution can happen much easier in the Permian than in most places.”

And, most of the basin is in Texas, “which is open for business—as is North Dakota (home of the Bakken), whereas a lot of places aren’t.”

Polzin adds that the horizontal Cline play, which is a shale that sits below the multi-bench Wolfcamp in the Permian conglomerate’s Midland Basin, is “kind of the next new hot thing. There’s no question about it.

“What is interesting is that, up until now you haven’t had too many people talk about the Cline. But Devon (Energy Corp.) just made a big announcement that it has 500,000 net Cline acres.” Also, newly public Laredo Petroleum Corp. is aggressively targeting Cline. Despite the debate about whether the Cline shale is the lowest member of the Wolfcamp, which is Permian in age, or is below Wolfcamp and is Pennsylvanian in age, “I think the Cline is the real thing,” he says.

Deal pricing always comes back to the nature of the targeted rock and how confident the buyer is in what the type curve—or future production—is going to be, he notes.

As for other plays:

--He thinks pricing for Mississippi Lime acreage is still early times; there have been only three significant deals yet for exposure to the liquids-rich rock, ranging from between $2,000 and $8,000 an acre.

--Meanwhile, Niobrara results have been mixed. Seven deals there have ranged from about $1,000 to $6,000 an acre. Pricing may improve as producers report more well results.

--In the Marcellus, prices have peaked and even fallen off some 30% as gas prices have fallen. In nearly two dozen deals, prices have ranged from $1,000 in the play’s infancy to $14,000 an acre 18 months ago. “Clearly, if gas prices come back in any way, (Marcellus deals ) will come back in terms of metrics.”

--In the Utica, prices have ranged from just under $2,000 to some $12,000 an acre. “The Utica would be, for me, the best example of a play that has gotten the most expensive the fastest with the least amount of information. We are starting to get a few wells’ (results) becoming public now and I am amazed by how fast prices have gone up. You hear of a lot of $5,000-acre deals getting done in the play with no wells drilled or no public data released.”

Has it peaked? “I don’t think that peak gets any higher.”

He notes that Total SA’s joint venture in some of Chesapeake Energy Corp.’s Utica acreage is at the equivalent of $15,000 an acre, but that’s a JV and not a sale. “I always caution that, when you are looking at JV-deal metrics, that you are careful to apply that only to JV deals. You have the A&D market and the JV market, and they’re not the same. Really, in almost every basin, the highest metric you’re going to find is a JV deal because that partner is paying a premium for the technology the operator brings—the learning part--that you don’t get in a traditional (purchase).”

--In the Bakken, in about a dozen deals, prices have ranged from $2,000 to $18,000 an acre; in the liquids-rich Eagle Ford window, from about $3,000 to $18,000 in about as many deals. In the Bakken and Eagle Ford, the technical uncertainty of the plays has been reduced because of the number of wells drilled now, thus acreage in the heart of the play has been derisked.

“Buyer and seller are much closer...I think those (play prices) have peaked…In the oil-price environment we’re in today…,I think Bakken and Eagle Ford are kind of as high as you’re going to get.”

But it’s not a bad thing: $15,000 an acre is pretty good. “There’s nothing wrong with that at all.”