Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON
News: Latest News
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance Pro.CalendarSectors 
All NewsEconomyCurrencies & ForexEconomic EventsCryptocurrenciesCybersecurityPress Releases

Exxon's shale output per well slips as total production rises -report

06/09/2021 | 03:59pm EDT

* Exxon's per-well output falls to sixth from first in key basin

* Shale acreage doubled with plan to sharply increase oil output

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 2018-2019.

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 analyst.

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 Mexico development."

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, though. (Reporting by Jennifer Hiller; editing by Gary McWilliams, Aurora Ellis and David Gregorio)


© Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
EOG RESOURCES, INC. -1.15% 72.86 Delayed Quote.46.10%
EXXON MOBIL CORPORATION -2.31% 57.57 Delayed Quote.42.96%
IHS MARKIT LTD. 1.31% 116.84 Delayed Quote.30.07%
LONDON BRENT OIL -0.82% 75.16 Delayed Quote.46.69%
OCCIDENTAL PETROLEUM CORPORATION -2.54% 26.1 Delayed Quote.50.78%
WTI 0.53% 73.659 Delayed Quote.52.09%
Latest news "Economy & Forex"
05:32pTunisian president calls on banks to reduce interest rates
RE
05:22pUNESCO UNITED NATIONS EDUCATIONAL SCIENTIFIC AN : IPCSD | Culture for Climate Action
PU
04:52pIndonesia's Lion Air to furlough 8,000 staff due to COVID travel restrictions
RE
04:46pU.S. Senate in rare Saturday session on $1 trln infrastructure bill
RE
04:30pTunisian president calls on banks to reduce interest rates
RE
04:02pMINISTRY OF COMMERCE AND INDUSTRY OF REPUBLIC : “Services Trade between India and the U.S will play a very important role in our ever-growing relations – Piyush Goyal”
PU
02:20pAs cases surge, Thai hospital uses containers to store bodies
RE
01:42pTVA TENNESSEE VALLEY AUTHORITY : Demolishes Coal Plant for Development and Cleaner Energy
PU
12:59pMore countries hike climate pledges, piling pressure on major emitters
RE
12:53pOlympics-Organisers seek to prevent heatstroke with AI gadget
RE
Latest news "Economy & Forex"