ExxonMobil to Increase, Accelerate Permian Output to 1 Million Barrels Per Day by 2024
- Updated plans call for nearly 80 percent more unconventional production
- Doubling of production in 2018 increases confidence in growth plans
- Increased spending to generate double-digit returns at low prices
IRVING, Texas--(BUSINESS WIRE)-- ExxonMobil said today it has revised its Permian Basin growth plans to produce more than 1 million oil-equivalent barrels per day by as early as 2024 – an increase of nearly 80 percent and a significant acceleration of value.
The size of the company’s resource base in the Permian is approximately 10 billion oil-equivalent barrels and is likely to grow further as analysis and development activities continue.
“We’re increasingly confident about our Permian growth strategy due to our unique development plans,” said Neil Chapman, ExxonMobil senior vice president. “We will leverage our large, contiguous acreage position, our improved understanding of the resource and the full range of ExxonMobil’s capabilities in executing major projects.”
“Our plans are attractive at a range of prices and we expect them to drive more value as we continue to lower our development and production costs,” Chapman said.
ExxonMobil’s investments in the Permian Basin are expected to produce double-digit returns, even at low oil prices. At a $35 per barrel oil price, for example, Permian production will have an average return of more than 10 percent.
The anticipated increase in production will be supported by further evaluation of ExxonMobil’s Delaware Basin’s increased resource size, infrastructure development plans, and secured capacity to transport oil and gas to ExxonMobil’s Gulf Coast refineries and petrochemical operations through the Wink-to-Webster, Permian Highway and Double E pipelines.
Among the company’s key advantages in the Permian, is its acreage position. The company has large, contiguous acreage that enables multi-well pads in large development corridors connecting to efficient gathering systems, reducing development costs and accelerating production growth. ExxonMobil’s scale, financial capacity and technical capabilities enable the company to maximize the value of the resource.
ExxonMobil is actively building infrastructure to support volume growth. Plans include construction at 30 sites to enhance oil and gas processing, water handling and ensure takeaway capacity from the basin. Construction activities include central delivery facilities designed to handle up to 600,000 barrels of oil and 1 billion cubic feet of gas per day and enhanced water-handling capacity through 350 miles of already-constructed pipeline.
“These investments support growth plans and ensure that as production levels continue to rise, we are well positioned in processing and transportation capacity,” Chapman said.
The investment plans will also bring great benefits to the local area. ExxonMobil’s expansion in the region will benefit communities in West Texas and southeast New Mexico through billions in property tax revenue, economic development and the creation of high-paying jobs.
ExxonMobil remains one of the most active operators in the Permian Basin and has 48 drilling rigs currently in operation and plans to increase its rig count to approximately 55 by the end of the year.
Increased use of technology, including enhanced subsurface characterization, subsurface modeling and advanced data analytics to support optimization and automation, will help the company reduce costs, improve its development plan and increase resource recovery.
ExxonMobil, the largest publicly traded international oil and gas company, uses technology and innovation to help meet the world’s growing energy needs. ExxonMobil holds an industry-leading inventory of resources, is one of the largest refiners and marketers of petroleum products and its chemical company is one of the largest in the world. For more information, visit www.exxonmobil.com or follow us on Twitter www.twitter.com/exxonmobil.
Cautionary Statement: Statements of future events or conditions in this release are forward-looking statements. Actual future results, including future production rates and timing; investment returns; infrastructure plans, capacities, and results; resource recoveries; production and development costs; rig counts; emission reductions; efficiencies and impacts of technology; and economic development impacts could differ materially due to changes in market conditions affecting the oil, gas and petrochemical industries or long-term price levels for oil, gas, refined products and petrochemicals; political and regulatory developments including changes in environmental laws and regulations; the ability to implement development, production, operating and management improvements as planned; reservoir performance; the actions of competitors; the occurrence and duration of economic recessions; the outcome of commercial negotiations; technical and operating factors; and other factors discussed in this release and under the heading “Factors Affecting Future Results” on the Investors page of ExxonMobil’s website at www.exxonmobil.com. As used in this release references to future returns mean discounted cash flow returns based on current company estimates and exclude prior exploration and acquisition costs. References to the resource base, oil-equivalent barrels and similar terms include quantities of oil and gas that are not yet classified as proved reserves under SEC definitions but that are expected ultimately to be moved to the proved reserves category and produced in the future. Forward-looking statements in this release are based on management’s information and belief at the time of this release and we assume no duty to update these statements as of any future date. This release is not intended to override the corporate separateness of various entities, including affiliated companies.
ExxonMobil Media Relations
Source: Exxon Mobil Corporation
Released March 5, 2019