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ExxonMobil (XOM) Continues to Add Acreage in Permian Basin

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World's largest publicly traded oil company, ExxonMobil Corporation (XOM - Free Report) recently declared that since May 2017, it has increased its Permian Basin presence by 22,000 acres. The company achieved this through multiple acquisitions and acreage trades. This has added value to its existing 6 billion barrels of oil equivalent resource base located in the Permian Basin.

The oil major is one of the biggest operators in the Permian Basin, the most popular unconventional basin at the moment. At present, ExxonMobil operates 19 drilling rigs in the area that include 14 horizontal well drilling rigs in the core Midland Basin. Since mid-2014, the company has drilled 200 wells in the Midland Basin area, where it has 130,000 acres. ExxonMobil has 250,000 acres in the Delaware Basin where it operates four drilling rigs.

With more acreage, the company will be able to boost returns in the basin by supporting longer laterals. The complexity of development will be reduced with more acreage and potential drilling locations.

Presently, 566 companies operate in the basin. ExxonMobil is rapidly increasing its presence in the region as are other leading oil companies.

These include ConocoPhillips (COP - Free Report) , Energen Corporation (EGN - Free Report) , Apache Corporation (APA - Free Report) and others. Exploration and production company, ConocoPhillips has around 1 million acres in the basin. In the last six years, the company has received 734 drilling permits. Although Birmingham, AL-based Energen owns around 150,000 acres in the basin, the number of permits gained is more than double of ExxonMobil. Texas-based Apache holds more than 2.5 million acres in the Permian Basin along with 3,300 permits received since 2012.

About the Company

Irving, TX-based ExxonMobil is engaged in oil and natural gas exploration and production, petroleum products refining and marketing, chemicals manufacture, and other energy-related businesses. Approximately 83% of ExxonMobil’s earnings come from operations outside the United States. The company divides its operations mainly into three segments: Upstream, Downstream and Chemicals.

ExxonMobil is the world’s best run integrated oil company, given its track record of high return on capital. It has collaborated with Russia for exploring potential commercial reserves in the country. However, tensions between the United States and Russia might affect its efforts to generate shareholder value by exploiting Russian oil and gas reserves.

Price Performance

ExxonMobil has lost 9.4% of its value year to date against the 0.6% rise witnessed by the industry it belongs to.

 

Zacks Rank

ExxonMobil carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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