ExxonMobil to triple Permian production by 2025

ExxonMobil has said it plans to triple total daily production to more than 600,000 boe by 2025 from its operations in the Permian Basin in West Texas and New Mexico. Tight oil production from the Delaware and Midland basins will increase five-fold in the same period. The increased volumes will be driven by reduced drilling costs, technology improvements and expanded acreage, reports the company.

Recent changes in the US corporate tax rate have created an environment for increased future capital investments, including ExxonMobil’s plan to spend more than $2bn on transportation infrastructure to support its Permian operations.

ExxonMobil is one of the most active operators in the Permian Basin, with an estimated resource of 3.4bn boe, with upside potential in multiple additional prospective horizons. A large majority of development drill wells are projected to have attractive returns at oil prices below current levels. To help achieve the planned production growth, the horizontal rig count in the Permian is expected to increase a further 65% over the next few years. The company reports it has doubled its footage drilled per day on horizontal wells in the Permian since early 2014 and reduced per-foot drilling costs by about 70%.

The increased production will provide low-cost supply and feedstocks to ExxonMobil downstream and chemical operations in Baytown, Beaumont and Mont Belvieu, Texas, and Baton Rouge, Louisiana. These facilities manufacture high-value products, including polyethylene to meet growing demand for high-performance plastics and advanced synthetic lubricant base stock products.

As part of its Permian-focused infrastructure, ExxonMobil recently acquired a crude oil terminal in Wink, Texas that is strategically positioned to handle Permian crude oil and condensate from Delaware Basin sources near the Texas-New Mexico border for transport to Gulf Coast refineries and marine export terminals.

The company plans to expand the Wink terminal and add key infrastructure upgrades that will efficiently move ExxonMobil and third-party production from the Delaware, Central and Midland basins in the Permian to ExxonMobil’s operations and other market destinations in the Gulf Coast region. Investment is expected to exceed $2bn. The company has previously announced plans to build and expand manufacturing facilities in the US Gulf region as part of its ‘Growing the Gulf’ initiative.

Growing the Gulf projects include a new ethane steam cracker at the ExxonMobil’s integrated Baytown facility that will provide ethylene feedstock for two new high performance polyethylene units at the nearby Mont Belvieu facility. A new production unit at the company’s polyethylene plant in Beaumont will increase the plant’s capacity by 65%, and expansions at the Baytown and Beaumont refineries will add more than 300,000 b/d of light crude processing capacity.