* Exxon's per-well output falls to sixth from first in key
* Shale acreage doubled with plan to sharply increase oil
HOUSTON, June 9 (Reuters) - Exxon Mobil Corp's oil
wells in part of a marquee U.S. shale field generated fewer
barrels per well as it ramped up overall spending and
production, according to a new report that looks at data from
A $6.6 billion acquisition in 2017 of New Mexico acres
doubled Exxon holdings in the Permian Basin that spans west
Texas and New Mexico. The Permian's New Mexico portion is among
Exxon's priorities with a goal to boost shale output to 700,000
bpd by 2025.
Exxon's average liquids output over a well's first 12 months
fell to 521 barrels per day (bpd) in 2019 in its Delaware basin
holdings in New Mexico, down from an average of 635 bpd in 2018,
according to IHS Markit data compiled by the Institute for
Energy Economics and Financial Analysis (IEEFA).
It dropped to 6th from first on a per-well production basis
among a group of large, publicly-trade producers, the data
showed, behind Occidental Petroleum, EOG Resources
, and others.
Full data for 2020 is not yet available and many wells
across the basin were shut-in due to the pandemic, but initial
findings of data that looks at the peak month of a well's
production "suggest that the company's Delaware wells have
continued to fall behind," said Clark Williams-Derry, an IEEFA
DRILLING MORE LAYERS
"We continue to execute on our strategy to maximize
production in the Permian, which includes our New Mexico
operations," said Exxon spokesperson Julie King.
In a March presentation to investors, Exxon reported steady
per-well gains between 2018 and 2020, citing its "core New
The company's Permian holdings have "met or exceeded our
volumes projections each year" for six years, Senior Vice
President Neil Chapman told investors.
Producers commonly drill their greatest prospects first.
In 2018, Exxon was focused on the best slice in the Delaware
basin, which has a layer cake of oil-producing zones, said Raoul
LeBlanc, analyst with consultants IHS Markit. It since has
started to produce from other layers as well.
Exxon's declining output per well came as the basin's
average improved about 5%, according to data released on
Wednesday by IEEFA. U.S. shale production in the Permian rose
sharply last decade but has slowed as oil companies focus on
profit over output.
The Delaware basin's per well average overall rose to 478
bpd in 2019 from 454 bpd the year before. Initial results for
2020 show the average reaching 501 bpd, IEEFA said.
"They're inviting investors to judge them on the production
of their wells," said IEEFA's Williams-Derry. "But their actual
production is not living up to what they seem to be claiming,"
he said referring to the company's investor presentation.
Exxon also is active in the Midland portion of the Permian
where it ranked 12th out of top 20 in 2019 on an output measure
that normalizes for well length. Its average production for the
first 12 months of a well improved between 2018 and 2019,
(Reporting by Jennifer Hiller; editing by Gary McWilliams,
Aurora Ellis and David Gregorio)