While it has long been thought that OPEC would continue the production cuts that were initially voted on this time last year, one thing has always been the worst kept secret in the industry. The production cuts needed the continued backing of Russia, which they appear to have. In fact, the Saudi Arabian oil minister, Khalid Al-Falih, noted recently that there was “no light between Russia and Saudi Arabia” and that they are completely united. Al-Falih said he would be “breathing down the necks of the other 24” participants to make sure they remain in compliance with the agreement.

With the agreement in place, one thing is for sure: With West Texas Intermediate crude pushing toward the $60 mark, producers in the oil-rich Permian Basin will ratchet up their production levels. That in turn would mean some big revenue gains.

We screened the Merrill Lynch energy research universe for the top Permian Basin companies rated Buy, and found four big potential winners for investors to consider.

Cimarex Energy

This is a top play for investors looking to the Permian Basin. Cimarex Energy Co. (NYSE: XEC) is an independent exploration and production company. Its primary activities are in the Mid-Continent and Permian Basin areas of the United States. The company is focused on increasing shareholder value through strategies linked to generating attractive economic returns on capital employed and profitable growth in per-share reserves, production and cash flow. It intends to profitably grow reserves and production through a balanced mix of exploration, exploitation and acquisitions.

Cimarex has a diversified base of high-quality production and attractive drilling opportunities. It should be noted that hedge funds have initiated sizable new positions in the company over the past year, and like its brethren in the Permian, many consider the company a very solid takeover target.

Investors receive a 0.32% dividend. The Merrill Lynch price target for the stock is $140. The Wall Street consensus target is $134.46, and shares closed Monday at $112.80.

Chevron

This integrated giant is a safer way for investors looking to stay or get long the energy sector, and it has big Permian Basin exposure. Chevron Corp. (NYSE: CVX) is a U.S.-based integrated oil and gas company with worldwide operations in exploration and production, refining and marketing, transportation and petrochemicals.

The company sports a sizable dividend and has a solid place in the sector when it comes to natural gas and liquefied natural gas. Some on Wall Street estimate the company will have a compound annual growth rate of over 5% for the next five years.

The company reported solid earnings for the third quarter, and the analysts have noted that the Permian Basin remains a key source of capital flexibility and is a key issue behind their relative preference for Chevron over some of the other majors.

Chevron shareholders receive a 3.61% dividend. Merrill Lynch has a $125 price target, and the consensus target is $124.22. The shares closed Monday at $120.84.

Diamondback Energy

This is another top Permian Basin play for more aggressive accounts. Diamondback Energy Inc. (NASDAQ: FANG) is an independent oil and natural gas company headquartered in Midland, Texas, and focused on the acquisition, development, exploration and exploitation of unconventional, onshore oil and natural gas reserves in the Permian Basin. Diamondback’s activities are primarily focused on the horizontal exploitation of multiple intervals within the Wolfcamp, Spraberry, Clearfork and Cline formations.

Wall Street analysts have noted in the past the company’s top-tier asset base, solid accretive additions and financial discipline, which they think allows for not only continued solid cash flow, but could put the company in play as a takeover target. Diamondback continues to drill some of the most economical wells in the United States as efficiencies improve, costs decrease and activity remains in the better regions.

The $126 Merrill Lynch price target is less than the consensus target of $128.40. The shares closed Monday at $109.02.

Pioneer Natural Resources

Many Wall Street analysts love this stock for a pure crude oil play. (NYSE: PXD) operates a modern fleet of more than 24 top performing drilling rigs throughout onshore oil and gas producing regions of the United States and Colombia. Pioneer production services are supported by 100 well-servicing rigs, more than 100 cased-hole, open-hole and offshore wireline units, and a range of advanced coiled tubing units.

Pioneer is a huge player in the Permian Basin and the Eagle Ford in Texas, and the company owns more than 20,000 locations in the world’s second largest oil reservoir in the Midland Basin. With a stellar balance sheet, the company is poised to remain a top player in the Permian as it expects to deliver solid production growth in 2018 and beyond.

Pioneer has continued to pursue a comprehensive Midland Basin infrastructure plan to accompany development, including water, tank batteries/saltwater disposal, sand and gas processing. These investments have helped lower the company’s direct cash operating costs with ongoing efficiency gains offering further opportunities for compression.

Pioneer investors receive just a 0.05% dividend. The Merrill Lynch price target is $200. The consensus estimate is $187.70. Pioneer closed trading on Monday at $156.35.

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Shares of these four top companies with big Permian Basin exposure may be better suited to growth portfolios, and they are all solid additions that are offering reasonably good entry points.

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