Exxon Mobil Corporation (XOM - Free Report) and Chevron Corporation (CVX), already major players in the Permian Basin, are gearing up for a significant increase in production in 2024.
The move indicates that U.S. oil production could surpass previous expectations, repeating the trend observed in 2023.
ExxonMobil’s Expansion through Acquisition
ExxonMobil entered an agreement to acquire Pioneer Natural Resources Company for $64.5 billion, marking a significant expansion in the Permian Basin. This acquisition is set to increase XOM’s production capabilities notably.
In the fourth quarter, ExxonMobil reported an impressive production of 610,000 barrels of oil equivalent per day (boe/d), slightly exceeding its 2023 guidance by 1.6%. The company plans to escalate its Permian volumes to 650,000 boe/d in 2024, with a long-term target of 1 million boe/d by 2027.
Post the Pioneer acquisition, ExxonMobil’s Permian volumes are expected to soar to 1.3 million boe/d, eventually aiming for a staggering 2 million boe/d.
Chevron’s Record Production and Goals
CVX set a record in the fourth quarter with an average production of 867,000 boe/d. This California-based giant is not far behind in its expansion plans. Chevron has started the year with 12 rigs and three frac crews in the Permian, and intends to increase production by 75,000 boe/d this year.
The goal is to exit 2024 with an average production of 900,000 boe/d and to hit the 1 million boe/d mark in 2025.
Environmental Concerns Amid Expansion
The aggressive expansion by ExxonMobil and Chevron, however, has not been without criticism. Environmentalists and some investors have expressed concerns, highlighting the urgent need to reduce emissions to mitigate the worst effects of climate change. Despite these pressures, the companies are balancing the need to increase cash flow through boosted oil production, while avoiding an oversupply that could depress prices.
Conclusion
The plans laid out by ExxonMobil and Chevron indicate notable growth in U.S. oil production, primarily driven by increased activities in the Permian Basin. While this could benefit the companies financially, it raises questions about the balance between economic growth and environmental responsibilities, particularly in the context of global climate change challenges. As 2024 progresses, the industry will closely watch these developments, alongside the ongoing dialogue about sustainable energy practices.
Zacks Rank & Stock to Consider
Currently, ExxonMobil carries a Zack Rank #3 (Hold).
Investors interested in the energy sector might look at the following company that presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Subsea 7 S.A. (SUBCY - Free Report) helps build underwater oil and gas fields. It is a top player in the Oil and Gas Equipment and Services market, which is expected to grow as oil and gas production moves further offshore.
The Zacks Consensus Estimate for SUBCY’s 2024 EPS is pegged at 79 cents. It has witnessed upward earnings estimate revisions for 2024 in the past 30 days. SUBCY’s 2024 earnings are expected to soar 163.3% year over year.
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Exxon Mobil Corporation (XOM - Free Report) and Chevron Corporation (CVX), already major players in the Permian Basin, are gearing up for a significant increase in production in 2024.
The move indicates that U.S. oil production could surpass previous expectations, repeating the trend observed in 2023.
ExxonMobil’s Expansion through Acquisition
ExxonMobil entered an agreement to acquire Pioneer Natural Resources Company for $64.5 billion, marking a significant expansion in the Permian Basin. This acquisition is set to increase XOM’s production capabilities notably.
In the fourth quarter, ExxonMobil reported an impressive production of 610,000 barrels of oil equivalent per day (boe/d), slightly exceeding its 2023 guidance by 1.6%. The company plans to escalate its Permian volumes to 650,000 boe/d in 2024, with a long-term target of 1 million boe/d by 2027.
Post the Pioneer acquisition, ExxonMobil’s Permian volumes are expected to soar to 1.3 million boe/d, eventually aiming for a staggering 2 million boe/d.
Chevron’s Record Production and Goals
CVX set a record in the fourth quarter with an average production of 867,000 boe/d. This California-based giant is not far behind in its expansion plans. Chevron has started the year with 12 rigs and three frac crews in the Permian, and intends to increase production by 75,000 boe/d this year.
The goal is to exit 2024 with an average production of 900,000 boe/d and to hit the 1 million boe/d mark in 2025.
Environmental Concerns Amid Expansion
The aggressive expansion by ExxonMobil and Chevron, however, has not been without criticism. Environmentalists and some investors have expressed concerns, highlighting the urgent need to reduce emissions to mitigate the worst effects of climate change. Despite these pressures, the companies are balancing the need to increase cash flow through boosted oil production, while avoiding an oversupply that could depress prices.
Conclusion
The plans laid out by ExxonMobil and Chevron indicate notable growth in U.S. oil production, primarily driven by increased activities in the Permian Basin. While this could benefit the companies financially, it raises questions about the balance between economic growth and environmental responsibilities, particularly in the context of global climate change challenges. As 2024 progresses, the industry will closely watch these developments, alongside the ongoing dialogue about sustainable energy practices.
Zacks Rank & Stock to Consider
Currently, ExxonMobil carries a Zack Rank #3 (Hold).
Investors interested in the energy sector might look at the following company that presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Subsea 7 S.A. (SUBCY - Free Report) helps build underwater oil and gas fields. It is a top player in the Oil and Gas Equipment and Services market, which is expected to grow as oil and gas production moves further offshore.
The Zacks Consensus Estimate for SUBCY’s 2024 EPS is pegged at 79 cents. It has witnessed upward earnings estimate revisions for 2024 in the past 30 days. SUBCY’s 2024 earnings are expected to soar 163.3% year over year.
Top 5 ChatGPT Stocks Revealed
Zacks Senior Stock Strategist, Kevin Cook names 5 hand-picked stocks with sky-high growth potential in a brilliant sector of Artificial Intelligence. By 2030, the AI industry is predicted to have an internet and iPhone-scale economic impact of $15.7 Trillion.
Today you can invest in the wave of the future, an automation that answers follow-up questions … admits mistakes … challenges incorrect premises … rejects inappropriate requests. As one of the selected companies puts it, “Automation frees people from the mundane so they can accomplish the miraculous.”
Download Free ChatGPT Stock Report Right Now >>
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