ExxonMobil pumped 400,000 b/d of oil equivalent from the Permian Basin in Q2 021, which it aims to increase by 40,000 boe/d in Q3 through continued operating efficiencies, the company said July 30.
Jack Williams, senior vice president, said the company’s current eight rigs are drilling the same lateral length that it took 25 rigs two years ago.
“Completions are improving, too,” Williams said during a Q2 earnings call. “Our frac rates are around 50% faster. This has resulted in a reduction in drilling and completion costs of more than 40%.”
Williams said the producer remains focused on capital efficiency, delivering free cash flow “across a broad range of price scenarios” and making double-digits returns when oil prices are below $35/b.
“This low-price resiliency also applies to our deepwater developments in Guyana and Brazil,” he said.
ExxonMobil’s Q2 refining throughput increased 3% from the previous quarter, when winter storms in Texas disrupted operations. Fuel margins also increased but remain low because of an ongoing market oversupply.
Low-carbon push
It was ExxonMobil’s first earnings call since climate-focused investors secured three seats on the company’s board of directors, delivering their strongest pushback yet that the oil driller must start facing the future by shifting to lower-carbon technologies and preparing for sharply lower fossil fuel demand.
Woods said executives have had productive meetings with the new board about developing a new strategy for the energy transition. He detailed plans for carbon-capture projects, low-emission fuels and methane detection technologies, but he took a cautious tone about the timelines.
“While we’ve got a really good portfolio of opportunities … the development of those projects to steel in the ground is going to take some time,” he said.
Woods said ExxonMobil expects to make final investment decisions next year for an expansion of its LaBarge CCS facility in Wyoming and a new carbon-capture technology pilot associated with the Porthos project at the port of Rotterdam.
The company signed a memorandum of understanding this month to explore infrastructure to help decarbonize the industrial basin in France’s Normandy region and an MOU to participate in the Acorn CCS project in Scotland.
Woods said a $100 billion proposal to capture and store CO2 emissions from heavy industries around the Houston Ship Channel was “gaining industry and third-party support,” without giving more details.
The company aims to increase production for low-emission fuels by 40,000 b/d by 2025 through several projects to repurpose existing refinery units and through co-processing biofeeds and purchase agreements, Woods said.
“In markets where low-carbon fuels policies incentivize the development of lower emission fuels like California and Canada, scale opportunities exist,” he said.