They call it “Permania”. The Permian Basin of western Texas and eastern New Mexico has become the hottest region in the US shale oil industry, for drilling, for production and for dealmaking. The region was already in high demand for acquisitions last year, and a couple of deals this week with a combined value of almost $10bn have confirmed that Permian assets are still the most sought-after for companies seeking to increase their US oil production. Asset prices have been bid up to the point that some observers are starting to ask if they are unsustainable. As one respondent to a recent survey for the Federal Reserve Bank of Dallas put it: “Permian transactions are approaching price multiples associated with a bubble or a Ponzi scheme”, reminiscent of the property boom of the early 1980s or the technology bubble of the 1990s. As in the dotcom bubble, there is a technological revolution underlying the inflation of asset prices. Spurred by the slump in crude prices that began in 2014, shale oil producers across the US have been cutting costs and boosting productivity. The Permian region has weathered the downturn the best. Since April 2015, oil production has dropped 19 per cent and 37 per cent respectively in the shale areas of Bakken in North Dakota and Eagle Ford in south Texas, according to the US Energy Information Administration. However, in the Permian it has risen 14 per cent.