The Executives and VPs who are in charge of the Permian operations should be terminated, the ones that receive RSUs equal to their annual salaries. First place to sixth place, is that a WINNING message. This is most certainly not the fault of the employees supporting, drilling and managing the production wells. Working hard in the hot and dry desert trying hard to raise their families and manage their personal finances without the 30% COLA they were promised. This shortfall rests solely on the shoulders of the Executives and the VPs managing these operations, not on the workers that are being PIPED, with no COLA, no amenities, poor health choices, large mortgages, poor school choices, long commutes, no 401k match, etc.
Exxon (XOM) Sees US Shale Oil Production Decline Per Well
CONTRIBUTOR
Zacks Equity Research Zacks
PUBLISHED
JUN 11, 2021 9:40AM EDT
Exxon Mobil Corporation XOM has been generating fewer barrels of oil from the prolific shale fields of the United States since 2019, per Reuters.
According to a latest report, the company’s oil wells, which are involved in some of the most promising shale fields, produced fewer barrels of oil per well despite an increase in overall expenditure and production.
In 2017, Exxon, which is one of the largest shale oil producers, acquired $6.6 billion of net acres in New Mexico, which doubled the company’s assets in the Permian basin that spans west Texas and New Mexico. Notably, the company intends to boost shale output in the New Mexico portion of the Permian basin to 700,000 barrels per day (bpd) by 2025.
Per data released by the Institute for Energy Economics and Financial Analysis (“IEEFA”), Exxon's average liquid output for the first 12 months of a well dropped to 521 bpd in 2019 from an average of 635 bpd in 2018 in its Delaware basin assets of New Mexico.
Notably, the company went down to the sixth place from the first on a per-well production basis, falling behind a group of publicly traded producers like Occidental Petroleum Corporation OXY and EOG Resources, Inc. EOG. Full data for 2020 is currently unavailable but initial findings suggest that the company's Delaware wells continued to lag.
However, in March, Exxon reported that its per-well profits in the New Mexico operations remained steady between 2018 and 2020. Moreover, its Permian assets have met or exceeded its volume projections per year for six years.
The company, which is also involved in the Midland portion of the Permian basin, ranked 12th out of 20 in 2019, based on an output measure that normalizes for well length. Importantly, its average production over a well's first 12 months improved between 2018 and 2019.
According to the data released by IEEFA, Exxon's shortfall in production per well came as oil output in the Permian basin grew by an average of about 5%. Although U.S. shale production in the Permian improved significantly last decade, it has slowed in recent years as oil companies focus on profit over output. However, most analysts opine that the company’s actual production is not living up to what they seem to be claiming.