The Permian Basin is pumping a record 6.3 million barrels of oil daily, with projections to hit 6.6 mb/d next year, driven by tech advances and disciplined practices.

Basin’s oil production goes ever higher

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Pumping a record 6.3 million barrels of oil per day and poised to reach 6.6 mb/d next year, the Permian Basin is driven by good prices, technological advances and fact-based optimism that the worldwide demand for oil and natural gas will stay strong for decades to come.

And as much oil and gas as it’s producing, a convergence of factors ensures that the Basin can and will generate even more. The prediction of 6.6 mb/d next year is from the U.S. Energy Information Administration.

Odessa oilman Kirk Edwards, State Rep. Brooks Landgraf and Waco economist Ray Perryman say the region continues to lead the world in energy innovations.

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Source: OA Online

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Crude oil prices moved higher today after the US EIA reported an estimated inventory decline of 6.9 million barrels for the week to August 30.

Oil prices rise on large crude inventory draw

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Crude oil prices moved higher today after the U.S. Energy Information Administration reported an estimated inventory decline of 6.9 million barrels for the week to August 30.

A day earlier, the American Petroleum Institute reported its own inventory estimate, which saw these drop by a sizable 7.4 million barrels in the final week of August. Analysts polled by Reuters had expected a draw of around 1 million barrels.

The EIA’s previous report pegged the decline in oil inventories at a modest 800,000 barrels, with mixed changes in fuel inventories.

For the final week of August, gasoline and middle distillate inventories saw more mixed changes.

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Source: Oil Price

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Major companies' recent mergers and acquisitions of independent oil firms have positively reshaped the energy industry in the Permian Basin.

Big oil mergers promise greater stability

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The recent series of mergers and acquisitions of independent oil companies by major companies has reshaped the energy industry for the better in the Permian Basin.

Odessa oilman Kirk Edwards, State Rep. Brooks Landgraf and Waco economist Ray Perryman say one of the big benefits will be more stability in the oil and natural gas markets as the major companies prove much less reactive to price fluctuations than the independents always were.

Starting last fall and continuing through the spring, ExxonMobil bought Pioneer Natural Resources for $60 billion, Chevron merged with the Hess Corp. for $53 billion, Diamondback Energy obtained Endeavor Energy Resources for $26 billion and Occidental Petroleum acquired CrownRock Operating for $12 billion. ConocoPhillips bought Concho Resources for $13.3 billion in 2020.

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Source: OA online

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Over the next 12 months, US Energy plans to invest over $750 million, primarily targeting projects in the Permian region.

US Energy Development Corporation to invest $750 million on Permian projects

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U.S. Energy Development Corporation (U.S. Energy) is expanding its operations in the prolific Permian basin. U.S. Energy is poised for significant growth and development in one of the most productive oil and gas regions in the United States.

Over the next 12 months, the company expects to deploy upwards of $750 million, with the majority of this capital earmarked for projects in the Permian.

Following closely on the heels of its success with the JT Morris pad, U.S. Energy brought its Westway 2122 two-well pad online in mid-June. Similar to JT Morris, the Westway project was completed under budget and ahead of schedule.

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Source: Oil & Gas 360

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The development of gas processing plants and a pipeline opening in the Permian Basin are expected to give crude producers a boost in the second half of 2024.

Expanding gas processing capacity may increase Permian crude

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Crude production is about to pick up in the Permian Basin, analysts say.

Permian players are expanding gas processing and takeaway capacity in the basin—an indication of plans to ramp up crude production over the next two years, according to analysts tracking the region.

Permian crude production has flattened since February, staying within striking distance of 6 MMbbl/d since last fall, according to a study by analytical firm RBN Energy. Consolidation, capital discipline and a lack of natural gas takeaway capacity have led E&Ps to keep production relatively steady.

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Source: Hart Energy

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The oil and gas industry has experienced a number of booms and busts over the past few decades, but for now, it appears to be flush with cash.

Oil and gas companies are swimming in so much cash that they’re cutting back on borrowing at a faster pace

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Last year, the demand for loans from fossil-fuel companies fell 6% year-on-year and that followed a decline of 1% in 2022.

From a climate perspective, this may sound like good news because the drop in bank lending to oil, gas and coal companies should mean less investment and less production over time.

The reality, however, is that oil and gas companies don’t need a lot of loans because they’re generating so much money these days from their underlying businesses, said Andrew John Stevenson, senior analyst at Bloomberg Intelligence. And that trend is likely to continue through the end of the decade, he said.

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Source: Fortune

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US oil is now encroaching on the key markets of the OPEC+ group, which has been restricting supply in an effort to boost oil prices.

US oil is stealing market share from OPEC+

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Surging U.S. oil production and shifting global oil flows amid geopolitical flare-ups have boosted American crude exports to record-high levels in recent months. Now U.S. oil is encroaching on the key markets of the OPEC+ group, which has been restricting supply in an effort to boost oil prices.

From Europe to Asia, buyers are purchasing more U.S. crude as sanctions against Russia and uncertainty over Venezuela’s sanctions relief renewal are making refiners anxious about importing Russian and Venezuelan crude. Europe has also turned to more U.S. oil as shipments from Asia are now taking longer to deliver cargo. Due to the Houthi attacks on commercial shipping, tankers mostly avoid the Red Sea/Suez Canal route – the fastest shipping lane from Asia to Europe – and are heading to the Cape of Good Hope around Africa.

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Source: Oil & Gas 360

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Despite the Biden administration's ambitious climate goals, the oil & gas industry in the US has seen unprecedented growth and profitability.

US oil and gas companies profits skyrocket as the US becomes the energy supplier of choice

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Despite the Biden administration’s ambitious climate goals, the oil and gas industry in the United States has seen unprecedented growth and profitability. The top 10 listed oil and gas producers in the US have reported a combined net income of $313 billion in the first three years of President Biden’s term (Financial Times), this is three times the $112 billion generated during the same period under President Trump.

This surge in profitability can be attributed to several factors, including record-high production levels as well as significant cost reduction particularly in the oil rich Gulf of Mexico. In December 2023, US oil production reached 13.5 million barrels per day, surpassing all previous records. According to the US Energy Administration, by 2024 the US will reach the daily production of 14 million barrels per day. Additionally, natural gas production exceeded 105 billion cubic feet per day for the first time. These achievements have solidified the US as a global energy leader, with the country now ranking as the second-largest exporter of crude oil and the largest exporter of liquefied natural gas (LNG), overtaking Qatar.

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Source: FX Street

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Exxon Mobil Corp. and Chevron Corp. surpassed earnings forecasts. Exxon rose as much as 1.6% in New York and Chevron climbed 2.8%.

Booming shale production lifts Exxon, Chevron forecasts as oil and gas earning season kicks off

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Exxon Mobil Corp. and Chevron Corp. surpassed earnings forecasts as bigger-than-expected oil output from shale fields helped cushion the blow from weakening crude prices.

Exxon rose as much as 1.6% in New York and Chevron climbed 2.8%. Exxon’s outsized result also was aided by a $1.14 billion boost from unsettled derivatives and record fuel production at its refineries.

Chevron, meanwhile, posted adjusted earnings of $3.45 a share that exceeded the Bloomberg Consensus estimate by 23 cents. The oil explorer also raised its dividend by a higher-than-forecast 8%.

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Source: World Oil

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Exxon, Chevron and Oxy led the way in a blockbuster year for Texas oil mergers amid a consolidation wave that is projected to continue.

How a spree of oil and gas mergers are setting the stage for 2024

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Last year was big for Texas oil companies as they jockeyed for access to petroleum-rich plots of the Permian Basin and branched into new territories.

Recent megadeals struck by Chevron and Exxon put pressure on others in the oil industry to catch the consolidation wave, potentially kicking off a new round of mergers and acquisitions that could have a profound impact on Houston for years to come. Additionally, milestone acquisitions made by Exxon and Occidental Petroleum in the carbon capture space also set the stage for Houston to be ground zero for the growing industry.

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Source: Houston Chronicle

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