• 4 minutes Energy Armageddon
  • 6 minutes How Far Have We Really Gotten With Alternative Energy
  • 10 minutes Russia Says Europe Will Struggle To Replace Its Oil Products
  • 8 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 3 hours Reality catching up with EV forecasts
  • 2 days "Natural Gas Price Fundamental Daily Forecast – Grinding Toward Summer Highs Despite Huge Short Interest" by James Hyerczyk & REUTERS on NatGas
  • 12 days US Oil Independence is a myth and will always be a myth
  • 1 day A Somewhat Realistic View of the Near Future for Electric Vehicles Worldwide
  • 7 days The Federal Reserve and Money...Aspects which are not widely known
  • 16 days Natural gas price to spike when USA is out of the market
  • 12 days Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
  • 15 days "Biden Is Running U.S. Energy Security Into The Ground" by Irina Slav
  • 15 days *****5 STARS - "The Markets are Rigged" by The Corbett Report
Charles Kennedy

Charles Kennedy

Charles is a writer for Oilprice.com

More Info

Premium Content

Oil Majors Expect Permian Production Growth To Slow

  • In their third-quarter reports, both Chevron and Exxon revised down their planned output from the Permian Basin.
  • Both companies reported record production in the third quarter, but they believe supply chain issues and a workforce shortage will slow growth.
  • As inflation rises and the number of drilled but uncompleted wells falls, production growth across the country will face headwinds

Two Big Oil majors have said they expect oil production in the Permian to rise by less than they had initially planned this year, suggesting industry problems are indeed serious enough to hold back production growth in the most prolific shale play in the United States.

In their third-quarter reports, Chevron and Exxon both revised down their planned output from the Permian, although moderately. Chevron said its Permian output had hit a record high in the quarter that just ended, at 700,000 bpd. Exxon also posted record production in the Permian, at 560,000 bpd for the third quarter.

Yet these figures are unlikely to change much for the rest of the year, due to the ongoing supply chain challenges in the industry and a continued workforce shortage, analysts have noted.

ADVERTISEMENT

Oilfield services are also becoming more expensive as overall inflation spills everywhere but also as demand for their services increases amid the tight oil supply context. This has given the OFS sector more power over pricing which is not good news for their clients.

The Permian remains the star of the shale patch, with production expected to hit another record next month, at 5.453 million bpd, according to the U.S. Energy Information Administration.

ADVERTISEMENT

Yet the statements by Exxon and Chevron add to concern that production growth even in the Permian is slowing down. The other indication that this may be the case is the declining number of drilled but uncompleted wells in the play. As of September, the number of DUCs across the U.S. stood at 4,333, which was the lowest since late 2013.

The decline was in big part the result of a surge in completions after the end of pandemic restrictions when demand for oil began to rebound fast. Yet new drilling was nowhere near pre-pandemic levels, so both DUCs and new well drilling declined, constraining production growth.

By Charles Kennedy for Oilprice.com

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage


ADVERTISEMENT


ADVERTISEMENT



Leave a comment
  • Mamdouh Salameh on October 31 2022 said:
    There is no surprise here since US shale oil is a spent force. This means that US crude oil imports are on the increase exceeding 9.0 million barrels a day (mbd) this year and the following years.

    It means also that the US Department of Energy (DoE) will find it virtually impossible to refill its SPR neither from purchases from shale oil production nor from a tight global oil market where there is no oil to spare.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News