ExxonMobil to Triple Permian Production by 2025, Expand Transportation Infrastructure
January 30 2018 - 11:00AM
Business Wire
- Company plans to invest more than $2
billion in terminal and transportation expansion
- Investments supported by changes to
U.S. corporate tax rate
- Downstream and Chemical expansions
progressing due to increased low-cost supply
ExxonMobil today announced that it plans to triple total daily
production to more than 600,000 oil-equivalent barrels 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.
Recent changes in the U.S. corporate tax rate create an
environment for increased future capital investments, including
ExxonMobil’s plan to spend more than $2 billion on transportation
infrastructure to support its Permian operations.
Through capital efficient production growth, the increased
volumes will be driven by reduced drilling costs, technology
improvements and expanded acreage. ExxonMobil has amassed a large,
highly contiguous acreage position, located in the prolific,
multi-layered oil zones of the Delaware and Midland basins.
Combined with operating experience gained through drilling more
than 5,000 horizontal unconventional wells, and a leading-edge
technology organization, ExxonMobil has the ability to efficiently
and profitably develop this attractive resource.
ExxonMobil is one of the most active operators in the Permian
Basin. To help achieve this growth, the horizontal rig count in the
Permian is expected to increase a further 65 percent over the next
several years. ExxonMobil 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 percent.
“Our geographic and competitive advantages in the Permian
position the company for strong growth and long-term value
creation,” said Sara Ortwein, president of ExxonMobil’s XTO Energy
subsidiary. “We can deliver profitable production at a range of
prices, and we have logistics and technology advantages over our
competitors.”
Through its $6 billion Bass companies acquisition in 2017,
ExxonMobil added an estimated resource of 3.4 billion barrels of
oil equivalent, with upside potential in multiple additional
prospective horizons. A large majority of the development drill
wells from the purchase are projected to have attractive returns at
oil prices below current levels.
“With this production growth, we are well positioned to maximize
value as increased supply moves from the Permian to our Gulf Coast
refineries and chemical facilities where higher-demand,
higher-value products will be manufactured,” Ortwein said.
The increased production will provide low-cost supply and
feedstocks to ExxonMobil downstream and chemical operations in
Baytown, Beaumont and Mt. 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. Those investments, expected
to exceed $2 billion, will support short-term construction jobs and
long-term positions.
ExxonMobil previously announced plans to build and expand
manufacturing facilities in the U.S. Gulf region as part of its
Growing the Gulf initiative.
Growing the Gulf projects include a new ethane steam cracker at
the company’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 percent, and expansions at Baytown and Beaumont
refineries will add more than 300,000 barrels per day of light
crude processing capacity.
About ExxonMobil
ExxonMobil, the largest publicly traded international oil and
gas company, uses technology and innovation to help meet the
world’s growing energy needs. ExxonMobil holds an industry-leading
inventory of resources, is one of the largest refiners and
marketers of petroleum products and its chemical company is one of
the largest in the world. For more information, visit
www.exxonmobil.com or follow us on Twitter
www.twitter.com/exxonmobil.
Cautionary Statement: Statements of future events or
conditions in this release are forward-looking statements. Actual
future results, including project plans, costs, and schedules;
production rates and capacities and resource recoveries; production
and development costs; efficiencies and impacts of technology; and
future returns and economic developments could differ materially
due to changes in market conditions affecting the oil, gas and
petrochemical industries or long-term price levels for oil, gas,
refined products and petrochemicals; political and regulatory
developments including changes in environmental laws and
regulations; the ability to implement operating and management
improvements as planned; the actions of competitors; the occurrence
and duration of economic recessions; the outcome of commercial
negotiations; and other factors discussed in this release and under
the heading “Factors Affecting Future Results” on the Investors
page of ExxonMobil’s website at www.exxonmobil.com. References to
oil-equivalent barrels and similar terms in this release include
quantities of oil and gas that are not yet classified as proved
reserves under SEC definitions but that we believe will ultimately
be developed and produced. Forward-looking statements in this
release are based on management’s information and belief at the
time of the release and we assume no duty to update these
statements as of any future date. This release is not intended to
override the corporate separateness of various entities, including
affiliated companies.
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