If one area in the country continues to draw capital expenditures and growth, it’s the Permian basin in West Texas. With a huge new find, and many of the top exploration and production companies increasing their presence, many on Wall Street are confident that 2017 will be another banner year. In fact, with over $21 billion in value spread over an incredible 130 transactions this year, the oil industry and investors are looking to the region to provide volume growth.

A new research report from Deutsche Bank’s outstanding analyst Josh Silverstein and his team makes the case that the Permian has become to go-to spot for exploration and production companies. They noted this in their report:

While the Permian renaissance began before 2016, this year may have been the key turning point for the basin as several producers doubled down or turned the portfolio over to make the basin the cornerstone asset for the foreseeable future.

They also note that a large percentage of the companies in the firm’s research coverage universe are players in the region. We chose four that are rated Buy that look like solid long-term plays for investors.

Concho Resources

Besides being one of the top energy plays in the Permian Basin, this is also a Wall Street favorite. Concho Resources Inc. (NYSE: CXO) is an independent oil and natural gas company engaged in the acquisition, development and exploration of oil and natural gas properties. Its principal operating areas are located in the Permian Basin of southeast New Mexico and West Texas. As of December 31, 2015, its total estimated proved reserves were 623.5 million barrel of oil equivalent.

The company is targeting to deliver 20% oil production growth next year, while investing within its cash flow, a move that many on Wall Street see as very positive. By carefully managing growth and spending, the company looks to be in position to restart the double-digit production growth next year, while many peers are struggling to generate enough excess cash flow to boost output.

The Deutsche Bank price target for the stock is $165, and the Wall Street consensus target is lower at $155.97. The shares closed Monday at $129.50, down 3.5% on the day.

Diamondback Energy

This remains another favorite of Wall Street analysts and is also a top Permian Basin play. 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.

Earnings estimates for the company continue to go higher, and many on Wall Street feel Diamondback can deliver total 2016 numbers that come in above current consensus estimates.

Deutsche Bank has a $120 price target on the stock. The consensus price objective is listed at $118.34. The stock closed Monday at $96.75 a share.

RSP Permian

This company was a production growth leader in the latter half of 2015 and into 2016. RSP Permian Inc. (NYSE: RSPP) is an independent oil and natural gas company focused on the acquisition, exploration, development and production of unconventional oil and associated liquids-rich natural gas reserves in the Permian Basin. The vast majority of the company’s acreage is located on large, contiguous acreage blocks in the core of the Midland Basin, a subbasin of the Permian.

The company has caught a string of upgrades from top Wall Street firms during 2016, and many have pointed to the possibility that the company very well may be a potential takeover candidate. Historically a vertical producer, the company has been transitioning to horizontal drilling the past few years and had 159.2 Mboe of proved reserves at the end of 2015 (70% oil). The company has conducted five acquisitions since its initial public offering in early 2014 and currently has 1,700 horizontal locations across eight prospective zones.

The company posted solid earnings for the third quarter and much of Wall Street is focused on the integration of the company’s recently acquired Delaware Basin acreage.

The Deutsche bank price target is $52, while the consensus is lower at $50.80. The shares closed most recently at $39.78, after retreating 5.35% on the day.

Pioneer Natural Resources

Many Wall Street analysts love this stock for a pure crude oil play, and it recently was upgraded by Deutsche Bank and Citigroup. Pioneer Natural Resources Co. (NYSE: PXD) engages in the exploration and production of oil and gas in the United States. The company produces and sells oil, natural gas and natural gas liquids. It has operations primarily in the Permian Basin, Eagle Ford Shale and West Panhandle field in the Texas Panhandle.

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 the number one player in the Permian as it expects to deliver production growth of 12% or more in 2016, compared to the company’s previous production growth target of 10%. The higher forecast growth rate reflects improving Spraberry and Wolfcamp well productivity.

Pioneer investors are paid a tiny 0.04% dividend. The $226 Deutsche Bank price target compares with the consensus price figure that is set at $214.63. The stock closed trading on Monday at $173.03, down almost 5% on the day.

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With the industry looking to the Permian Basin to provide annual production growth, the analysts do acknowledge that challenges such as higher service costs remain in place. However, they also feel that the environment remains favorable for margin improvement and cash flow growth.

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