ExxonMobil Corp. plans to increase its Permian basin production to 1 million boe/d by as early as 2024, which would be an 80% increase of its current production in West Texas and southeastern New Mexico.
Other companies—including Chevron Corp., BP PLC, Royal Dutch Shell PLC, and Occidental Petroleum Corp.—also have discussed increasing their Permian activity. Chevron said the Permian accounts for much of its 2019 exploration and production budget.
Neil Chapman, ExxonMobil’s senior vice-president, said in a Mar. 5 statement, “We’re increasingly confident about our Permian growth strategy. Our plans are attractive at a range of [oil and natural gas] prices.”
ExxonMobil estimates an average return of 10% at $35/bbl for its Permian production. As of Mar. 5, ExxonMobil had 48 drilling rigs working in the Permian and planned to increase its rig count to about 55 by Dec. 31.
The company expects the Delaware basin will account for much of the anticipated increased production within the Permian basin.
ExxonMobil also is counting on infrastructure development and secured transportation capacity to move oil and gas to ExxonMobil’s refineries and petrochemical plants along the Gulf Coast through the Wink-to-Webster, Permian Highway, and Double E pipelines.
The company holds contiguous acreage, enabling multiwell pads connected with gathering systems, which helps cut development costs and accelerate production growth. ExxonMobil said its scale, financial capacity, and technical capabilities also helps maximize resource value.
Plans include construction at 30 sites to enhance processing, water handling, and ensure takeaway capacity. Construction activities include central delivery points designed to handle up to 600,000 b/d of oil and 1 bcfd of gas.
ExxonMobil also plans enhanced water-handling capacity through 350 miles of existing pipeline.
“We are well positioned in processing and transportation capacity,” to handled increased production, Chapman said.
Increased technology, including enhanced subsurface characterization, subsurface modeling, and advanced data analytics will help reduce costs and increase recovery, ExxonMobil said.