Exxon Mobil (XOM -0.2%) aims to cut the cost of pumping oil in the Permian Basin to just $15/bbl, thanks to its massive scale of planned drilling activity that it says will help generate $5B of cash flow from the region by 2023.
The scale means XOM can spread its costs over such a big operation that the Permian will become competitive with almost any place in the world, says Staale Gjervik, president of the company's XTO Energy shale division.
XOM plans to deploy 55 rigs in the Permian this year, by far the most of any driller, as it aims for a 5x increase in production from the region to 1M bbl/day by 2024, as well as plans to build its own takeaway infrastructure and join a giant conduit project to make sure its oil is not stuck in bottlenecks that have depressed prices in west Texas.
“The way we are approaching it is very unique compared to most, if not really everybody out there, as far as the scale," Gjervik says.
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