Reuters – Exxon Mobil Corp. on March 5 estimated production at its top U.S. shale field would rise to 1 million barrels of oil and gas per day as early as 2024 from 600,000 by 2025 previously.
The target is five times as much as the company now produces in the Permian Basin of West Texas and New Mexico where the world’s largest publicly traded oil company has 1.6 million acres.
Exxon Mobil said in a statement that its production would be profitable in the Permian even if oil prices fell to $35 per barrel. U.S. oil futures settled at $56.59 per barrel on March 4.
The company has 48 rigs working in the Permian—about 10% of the region’s total, according to Baker Hughes, a GE company, and expects to increase the number of drilling rigs to 55 by year-end.
It also has 30 sites under construction to handle oil and gas processing and water handling, and between 4,000 and 5,000 workers on its acreage on any given day, Staale Gjervik, the newly named president of Exxon Mobil’s shale arm XTO Energy, said in an interview on March 4. Gjervik replaced Sara Ortwein, who retired March 1, an Exxon Mobil spokeswoman said.
Exxon Mobil bought out shale producer XTO in 2009 and in 2017 purchased the Permian holdings of the Bass family of Fort Worth, Texas. Now the company is approaching the acreage with a manufacturing mindset, Gjervik said. “With the size of this acreage we can apply some of the more traditional mega-project type tools we have within Exxon Mobil,” he said.
The Permian, which will produce about 4 million barrels per day (MMbbl/d)this month, is expected to generate 5.4 MMbbl/d by 2023, greater than any single member of OPEC other than Saudi Arabia, according to consultancy IHS Markit.
Exxon Mobil said last week that its oil and gas reserves globally rose nearly 23 percent last year, driven mainly by holdings in U.S. shale, offshore Guyana and Brazil.
The reserve update, which is required annually by U.S. regulators, comes as Exxon Mobil has been spending heavily under CEO Darren Woods on fields and projects to reverse weak oil and gas production.
Exxon Mobil holds its annual meeting with analysts on March 6 in New York.
Jennifer Hiller, Reuters