“It’s a madhouse,” said J.E. Wolf III in a recent Bloomberg article. “I’ve been selling real estate here for 43 years, and I’ve never seen it like this.”

Teenagers fresh out of high school are earning $75,000 annually driving trucks.

Locals have to postpone weddings because there are not enough hotel rooms available for guests. And when they are available, a room you might expect to run you $50 is going for $300 a night

Welcome to Midland, Texas — also known to some as “Boomtown USA.”#-ad_banner-#

Midland was the fastest-growing metropolitan area in the United States in 2012, according to the U.S. Census Bureau. The total unemployment rate for the town is 3.3%, which is less than half the national average of 7.7%.

Based on per-capita personal income, Midland was also the second-wealthiest metropolitan area in the United States, bested only by the hedge-fund enclave of Bridgeport, Conn.

That’s right. Midland, with a population of 151,000 people, is generating more per-capita income than San Francisco, San Jose (Silicon Valley) or Washington, D.C.

How is this possible?

The answer is simple: Midland happens to sit on top of the Permian Basin, one of the largest areas of proven oil reserves in the United States as well as the ninth-largest reserves of natural gas.

And there are plenty of reasons to think this boom is just getting started…

For example, Midland’s district was issued more new drilling permits in 2012 than any other area in the state.

In fact, the number of permits issued in Midland County has soared 200% since 2009 — totaling more than 1,050 in 2012. As more of these new wells begin production, the potential for profit is enormous.

This is a trend we’ve seen play out before. Nathan Slaughter, StreetAuthority’s expert resource analyst, has been covering the boom in North Dakota’s Bakken Shale for years. Two big players in this region, Whiting Petroleum (NYSE: WLL) and Heckmann Corp. (NYSE: HEK), are featured in the real-money portfolio of his Scarcity and Real Wealth newsletter.

Yet, unlike the more established Bakken Shale play, energy production from horizontal drilling and fracking activities in the Permian is still relatively new.

Ed Parker is a regional sales manager for Goliath Industries, a company that furnishes housing for oilfield workers. He recently compared the two plays in the Fort Worth Star-Telegram:

“The Permian is about a year and a half behind North Dakota. We’re on the front edge of the boom,” said Parker.

So how can investors get in on the action?

There are several options. There are some big names operating in the region, including Chevron (NYSE: CVX), Pioneer Natural Resources (NYSE: PXD) and Devon Energy (NYSE: DVN).

And while these are all great companies, I decided to dig a little deeper. In doing so, I discovered a smaller, relatively unknown company with a big presence in the Permian.

The company I’m talking about is Concho Resources (NYSE: CXO).

Now, when I say that Concho is a smaller company, I mean relative to some of its energy behemoth peers. Concho’s market cap is $9.7 billion. Compare that with Chevron’s market cap of $233 billion and you’ll see what I mean.

Unlike some of its larger, more diversified peers, Concho is basically a “pure-play” bet on the future of the Permian Basin.

Since 2009, Concho has drilled more wells in the Permian than any other company. Devon Energy, which I recently wrote about comes in a close second.

Concho has increased production more than 20-fold since 2005. And its proven reserves have increased more than 30-fold. With its most recent acquisitions, particularly the $1.6 billion acquisition of Marbob Energy in 2010, Concho is well positioned to continue posting double-digit growth throughout the next several years.

Risks to Consider: While the Permian Basin is without a doubt one of the most attractive horizontal drilling plays in the United States, Concho’s pure-play focus and lack of diversification could result in reduced profits as the play matures.

Action to Take –> Unlike competitors Chevron and Pioneer, Concho does not currently pay a dividend. It is also slightly more expensive, with a forward price-to-earnings (P/E) ratio of 15. While I plan to keep an eye on Concho, I would like to see it come down in price a bit and reduce its debt load before I would rate it a “buy.”

In the meantime, investors interested in gaining exposure to the Permian Basin should take another look at Devon, which, with a current P/E ratio of 11 and low price-to-book ratio of 1.1, may be a more attractive buy at this time.