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Image source: Bidnessetc.com.

Occidental Petroleum (NYSE:OXY) has a new CEO, and she is making it no secret that she intends to grow the company's leading position in the Permian Basin via acquisition.

That could open up an opportunity for investors to profit should we own a company Occidental eventually acquires.

So, which companies might be on Oxy's short list?

The Permian is Oxy's core domestic asset

The first United States shale oil play was the Bakken, and the Eagle Ford followed. It will be the Permian, however, that turns out to be the biggest and best over the long term as it is just loaded with oil. Land in the Permian is blessed with many hydrocarbon zones stacked on top of each other on the same parcels of land like a layer cake.

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Image source: Laredo Petroleum.

Because the oil is stacked in zones one on top of the other, owning one acre in the Permian is like owning four acres in other plays. That is why we've seen acreage in the Permian retain its value better through this oil crash.

Production in the Permian is certainly not new, but horizontal drilling with multi-stage fracturing is. The Permian has been the core of U.S. crude production since the 1920s, and it made Texas a huge player in the global oil market. The productive region of the Permian spreads across Texas and New Mexico and covers land seven time the size of the state of Massachusetts. Even today, it accounts for 20% of U.S. oil production.

Occidental views the Permian as the core of its domestic oil and gas business. The company has over 1 million net acres in the play and had production of 145,000 barrels of oil equivalent per day in 2015.

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Image source: Occidental Petroleum Presentation.

Who might Oxy like to acquire?

With a market capitalization of $54 billion, Occidental is a very big company, so for an acquisition to move the needle, Occidental is going to have to target a pretty big fish. Fortunately, Occidental is pretty much the largest of the independent operators; there aren't many other independents it isn't big enough to buy.

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Image source: Occidental Petroleum Presentation.

If you scroll through the list of large Permian operators (see the slide below), two names really stand out as making sense for Occidental to take a run at. One would be Apache (NYSE:APA), and the other would be Pioneer Resources (NYSE:PXD)

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Image source: Occidental Petroleum Presentation.

Both companies are roughly half the size of Occidental, which would probably put them at the high end of what the company might be able take on. Clearly, they would both move the needle for Occidental in terms of production and reserves.

Apache: third-largest Permian acreage position

Like everyone else who has the assets to do so, Apache has been focusing on the Permian. In 2015, Apache spent 60% of its capital expenditure budget on this play.

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Image source: Apache Corporate Presentation.

Apache has the third largest acreage position in the Permian with a whopping 3.2 million gross acres. Fourth-quarter Permian production for Apache came in at 174,000 barrels of oil equivalent per day.

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Image source: Apache Corporate Presentation.

Pioneer: leading producer from the Sprayberry/Wolfcamp formations

Pioneer is also a big Permian player; almost two-thirds of the company's production comes from the Spraberry/Wolfcamp formations. Should Occidental take on these Pioneer assets, you might see the company dispose of Pioneer's significant Eagle Ford exposure to further key in on the Permian.

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Image source: Pioneer Resources.

Occidental thinks the Permian is still getting bigger

While the horizontal oil revolution really did turn the global oil market upside-down, the reality is, it's still in the early innings. The technologies and techniques just keep getting better and better.

Fringe areas of these horizontal plays that are currently not economic may become so over time as the technology boundary is pushed out further. Occidental's CEO Hollub said (in the interview linked earlier) she expects that adjacent areas immediately beside the current known boundaries of the play could eventually be oil-producing as well.

That potential for expansion is a key reason Occidental wants to keep building out its Permian landholdings now, before these boundaries are pushed out further. Locking up Permian land now is going to create opportunities to apply new technologies and grow reserves for years to come.

If investors are interested in owning horizontal oil producers, those with a Permian focus like these three are the ones to pay attention to. These are the companies with the assets that can make them long-term winners.

TMFWolfpack has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.