Exxon, Chevron to Grow Permian Output at Double Rate of Rivals

Exxon Mobil Corp. and Chevron Corp. are both on course to grow production from the Permian Basin 10% this year, more than double the rate of their smaller rivals.

(Bloomberg) — Exxon Mobil Corp. and Chevron Corp. are both on course to grow production from the Permian Basin 10% this year, more than double the rate of their smaller rivals.

Exxon produced about 620,000 barrels a day in the second quarter from the world’s largest shale basin, which straddles Texas and New Mexico, while Chevron’s output increased to 772,000 barrels, the companies said Friday. Together the companies’ Permian production now makes up nearly a quarter of the basin’s total.

Both aim to accelerate production to more than 1 million barrels a day before 2030 before holding flat for the next decade.

The US supermajors’ aggressive production stands in marked contrast their publicly traded independent rivals who have mostly capped growth rates at 5% a year. Rather than investing all their cash in new wells, they’re now focusing on returning cash to shareholders through dividends and buybacks.

Read More: Exxon Profit Misses Estimates as Natural Gas, Refining Slip

Exxon and Chevron are making enough cash elsewhere in their global portfolios that they can afford to spend on growing shale, which was of little interest to them until about 10 years ago. Chevron sees 30% returns on capital employed in the Permian, more than double the company’s global level currently.

Exxon and Chevron’s production plans are based on their current acreage but could be increased further if they were to make acquisitions.

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