HEW-TEX INDUSTRY NEWS ROOM
Exxon aims for $15/bbl costs in large Permian operation
World Oil: By Kevin Crowley on 3/14/2019
HOUSTON (Bloomberg) — Exxon Mobil plans to reduce the cost of pumping oil in the Permian to about $15/bbl, a level only seen in the giant oil fields of the Middle East.
The scale of Exxon’s drilling means that it can spread its costs over such a big operation that the basin will become competitive with almost anywhere in the world, Staale Gjervik, president of XTO Energy, the supermajor’s shale division, said in an interview.
Development, operating and land acquisition costs will be “in and around $15/bbl,” he said on the sidelines of the CERAWeek Conference by IHS Markit in Houston. “The way we are approaching it is very unique compared to most, if not really everybody out there, as far as the scale.”
The shale revolution has made the Permian into the world’s largest shale field, with production topping 4 MMbpd, almost as much as Iraq, OPEC’s second-biggest member. But the rapid growth has often meant that producers burn cash flow to reinvest in the expansion, prompting investors to call on them to focus more on returns in 2019.
Exxon plans to deploy 55 rigs in the Permian this year, by far the most of any driller, as it aims to increase output in the region fivefold to about 1 MMbpd by 2024. Its strategy also includes building its own takeaway infrastructure from separation tanks to pipelines, and it’s even joining a giant conduit project to make sure its oil doesn’t get stuck in bottlenecks that have depressed prices in West Texas. Read more…
U.S. Supermajors Could Form A New Oil Cartel
The ambitious shale growth plans of the U.S. supermajors could in the future allow them to control so much of U.S. shale oil production that they could also control the price of the U.S. light tight oil going to foreign markets in an ‘OPEC of their own kind,’ Investing.com quoted John Kilduff, founding partner at Again Capital, as saying.
If the U.S. supermajors, such as Exxon and Chevron, end up controlling a lot of the U.S. shale production with their plans to significantly boost Permian production, and if smaller shale players bleed cash and decide to sell acreage and operations to Big Oil, then supermajors could be the ones determining the price of light crude oil, according to Kilduff.
Exxon and Chevron both announced increased targets for their Permian production last week. Chevron now sees its Permian unconventional net oil-equivalent production rising to 600,000 bpd by the end of 2020, and to 900,000 bpd by the end of 2023. Exxon revised up its Permian growth plans to produce more than 1 million oil-equivalent barrels per day by as early as 2024, which would be an increase of almost 80 percent. Read more…
Royal Dutch Shell Is Looking to Bulk Up Its Position in the Permian Basin
The global energy giant is trying to keep up with its big oil peers.
The Permian Basin is quickly becoming one of the best oil and gas resources in the entire world. As a result, energy companies have flocked to the region, spending billions of dollars to lock up drillable land. These purchases provided the buyers with significant resources, which should give them plenty of fuel to grow production at a fast pace over the next several years.
While Royal Dutch Shell (NYSE:RDS-A)(NYSE:RDS-B) owns a sizable position in the Permian, it lacks the same scale of rivals ExxonMobil (NYSE:XOM) and Chevron (NYSE:CVX), which expect the region to be a major growth driver. Because of that, the company is currently looking to make an acquisition to bulk up its Permian position so it can participate in that growth.
Drilling down into Shell’s foray into the Permian
Shell was one of the early buyers of Permian land as it scooped up more than 600,000 net acres from Chesapeake Energy for nearly $2 billion in 2012. As part of the deal, Shell inherited Anadarko Petroleum (NYSE:APC) as a 50-50 partner. While the two feuded in the past, they’ve since reconciled and are now working together to develop this acreage. Read more…
Permian Basin oil output seen doubling to 8 million barrels in four years, boosting US exports
Booming Permian Rewriting Rules For Global Oil Industry
Conventional wisdom used to be that as the major integrated oil companies acquired smaller independents, production growth in the Permian Basin would slow. The same wisdom held that regardless which companies were operating in the Permian and other shale plays, domestic U.S. production would peak in the mid-2020s and then begin to decline.
It’s time to reassess those assumptions.
Bullish projections this week from Exxon Mobil and Chevron on their separate operations in the Permian are rewriting the conventional wisdom about that basins potential. Read more…
ExxonMobil, Chevron ramp up Permian oil output
Joint venture to add crude oil, natural gas & saltwater pipelines in Permian Basin
A new joint venture between two pipeline companies will allow their customers to move more crude oil, natural gas and produced water on the New Mexico side of the Permian Basin.
Five Point Energy of Houston and Matador Resources of Houston announced the formation of San Mateo Midstream II LLC on Monday. The joint venture will provide services ranging from natural gas gathering and processing to crude oil gathering, produced water gathering and saltwater disposal in southeastern New Mexico. Read more…
Texas Oil Production Breaks New Record
OilPrice.com: By Tim Daiss – Feb 12, 2019, 3:00 PM CST
The state of Texas now has even more bragging rights in the U.S. Oil Patch, and even globally According to a new report from the Texas Independent Producers Royalty Owners Association, the Lone Star state’s oil production hit a record level not seen since 1973, the same year of the Arab oil embargo that roiled global oil markets.
Texas oil wells produced more than 1.54 billion barrels of crude in 2018, topping the previous record of 1.28 billion barrels set in 1973, TIPRO reported in its annual “State of Energy Report.” Natural gas production also grew, reaching 8.8 trillion cubic feet (tcf) last year. In 2017, Texas also came close to beating the 1973 oil output record, pumping 1.26 billion barrels of oil.
To put Texas oil production in perspective, if it were a country, it would be the world’s third oil producer sometime this year, behind only Russia and Saudi Arabia, HSBC said in a report. The main engine of Texas oil output is the Permian basin that spans West Texas and southeastern New Mexico and is one of the most prolific oil and gas producing regions in the U.S. The Permian Basin is approximately 250 miles wide and 300 miles long, across West Texas and southeastern New Mexico. It encompasses several sub-basins, including the Delaware Basin and the Midland Basin. Read more…
Drilling Down: Chevron to ramp up Permian Basin drilling projects
Oil giant Chevron is preparing for a large round of drilling in the Permian Basin of West Texas.
The California oil company filed 12 drilling permit applications with the Railroad Commission for horizontal drilling and hydraulic fracturing projects on its DR State Wise Unit lease in Culberson County.
Located off FM 652 between Guadalupe Mountains National Park and the town of Orla, all 12 drilling projects target the Ford West field of the Wolfcamp geological formation down to a depth of 9,000 feet.
Chevron closed 2018 with a nearly $14.9 billion profit on $166.3 billion of revenue. The company attributes part of those profits to a production increase in the Permian Basin where it holds more than 2.2 million acres of leases.
With a large presence in Houston, Chevron filed for 124 drilling permits in Texas last year. The company’s nearly 2,300 Texas leases produced nearly 28.9 million barrels of crude oil, more than 116.6 billion cubic feet of natural gas and nearly 5.4 million barrels of condensate during the first 11 months of 2018. read more…
Meridian Energy Group, Inc. establishes Site Control for Permian Basin Refinery
Company will apply Lessons Learned in the Design and Permitting of its Bakken-area Davis Refinery for a Full-Conversion Crude Refinery Sited in Winkler County, Texas, the Heart of the Permian Basin
| Source: Meridian Energy Group
BELFIELD, N.D., Feb. 11, 2019 (GLOBE NEWSWIRE) — Meridian Energy Group, Inc., the emerging growth refining firm and leading innovator in advanced technology and environmentally-beneficial petroleum processing facilities, announced today that the Company has entered into agreement with a Winkler Company subsidiary (“Winkler”) establishing site control in Winkler County, Texas for a new Meridian full-conversion crude oil refinery. This new Meridian refinery will process local Permian (Delaware Basin) crude oil into a full slate of refined products for local and regional markets. Now that site control has been established, Meridian will proceed with design and permitting of this new crude oil refining facility. Meridian Energy’s first refinery, being constructed in Billings County, North Dakota, is proving that advanced technology can be used to meet strict environmental controls to build and operate full-conversion petroleum processing facilities. read more…
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