Exxon puts Permian assets up for sale

Exxon is looking to sell some conventional oil and gas assets in the Permian, Bloomberg reported, with the proceeds from the potential sale being about $1 billion.

In a written response to the publication’s questions, Exxon said it is “exploring market interest in select conventional assets in West Texas and Southeast New Mexico,” adding that “This decision is consistent with our strategy to continually evaluate our portfolio.”

Bloomberg also cited unnamed sources as saying the assets to be divested include wells in the Central Permian Basin, where production has not been particularly high but has been steady. The divestment was in line with Exxon’s increased focus on shale oil and gas development.

Exxon’s biggest step in this direction recently was the $60 billion takeover of Pioneer Natural Resources completed earlier this year. The completion of the megadeal significantly strengthened Exxon’s presence in the prolific Permian Basin. This strategic move effectively doubled Exxon’s footprint in the region, solidifying its position as the dominant player in one of the most productive parts of the shale area.

The acquisition gives Exxon access to more than 1.4 million net acres in the Delaware and Midland basins of the Permian formation. According to the company’s forecasts, the combined entity is poised for a substantial increase in production to 1.3 million bpd. Looking ahead, Exxon anticipates further growth, with production expected to reach an impressive 2 million bpd by 2027, underscoring the long-term strategic value of this acquisition.

Meanwhile, Exxon plans to increase its total oil production to about 4.3 million barrels per day this year, which would be the most in a decade, Bloomberg said in its report on divestment plans for Permian conventional wells. The Pioneer acquisition will be a major contributor to this higher production.

By Irina Slav for Oilprice.com

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