ExxonMobil has revised growth plans for its Permian Basin operations to increase total daily production to 1 million barrels of oil equivalent by as early as…
ExxonMobil has revised growth plans for its Permian Basin operations to increase total daily production to 1 million barrels of oil equivalent by as early as 2024, up from last year’s forecast of 600,000 barrels. This announcement is in conjunction with CEO Darren Wood stating that Exxon is bumping capital spending for 2019 up 15% to $30 billion with a plan to raise it to $35 billion in 2020. Present water cut rates in the Permian Basin would mean that Exxon could also be producing, at a minimum, 4 million barrels of water per day.
ExxonMobil’s resources in the Permian Basin come to approximately 10 billion barrels of oil equivalent, but this figure is anticipated to grow as analysis and development continue. Exxon holds about 1.6 million net acres of primarily contiguous land in the Permian Basin, with multi-well pads and integrated gathering and treatment systems. Speaking at the beginning of the year, senior vice president of Permian development Staale Gjervik told attendees that Exxon can produce in west Texas at a profit under $40 a barrel, so there is little reason to believe that with additional capital spending the 1 million barrel of oil equivalent per day is an achievable target.
ExxonMobil is actively building infrastructure in west Texas to support volume growth at this scale, including water handling and takeaway capacity. The operator currently has 48 drilling rigs operating in the Permian Basin and plans to have 55 by the end of the year. Water in Oil received no word from Exxon about how much of the 2019 capital budget will go toward improving water treatment and handling.