US energy companies ExxonMobil and Chevron have announced plans to increase oil and natural gas production from the Permian Basin in the near future to drive growth.
The basin is a premier shale play and a key driver of the US oil and gas production.
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ExxonMobil is targeting an output of more than one million oil-equivalent barrels per day (boed) by 2024, marking an 80% increase.
The company holds a resource base of around ten billion oil-equivalent barrels in the Permian and expects to achieve double-digit returns from its investments.
In addition, ExxonMobil offers large, contiguous acreage in the basin that allows it to efficiently and cost-effectively drill multiple wells.
ExxonMobil senior vice-president Neil Chapman said: “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.
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By GlobalData“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.”
To support the production growth plans, the company is undertaking construction activities to increase water handling and oil and gas processing, as well as ensure takeaway capacity from the basin.
Meanwhile, Chevron has outlined growth plans that include achieving unconventional production of 900,000boed at the Permian Basin by 2023. The company expects output to reach 600,000boed by the end of 2020.
The company plans to spend between $19bn and 22bn towards capital and exploratory costs from 2021 to 2023.
Chevron chairman and CEO Michael Wirth said: “Chevron is in an exceptional position to deliver industry-leading value to shareholders. Our advantaged portfolio is driving strong production growth with lower execution risk, higher cash flow and increased cash returns to shareholders.”
The firm expects 2019 cash generation to be around $30bn, which will be used to finance its capital programme and share repurchase plans.
