Sumitomo’s Loss Shows Shale Isn’t Booming for Everyone

Land in the Permian Basin, the busiest shale patch in the U.S. oil boom, is worth either $1,000 an acre or 50 times more, depending.

On Sept. 29, Calgary-based driller Encana Corp. announced plans to buy a company that owns a West Texas prospect for $7.1 billion, or about $50,000 an acre. One day later, Tokyo-based Sumitomo Corp. estimated its land in the same region was worth a fraction of that price when it took a $1.55 billion writedown on its investment.