Exxon Mobil Bets Big On Brazil, Extends Wager On Permian

Exxon Mobil Bets Big On Brazil, Extends Wager On Permian

Chamber Articles Category: Economic News Post Date: 09/29/17 Source: Forbes By: Claire Poole
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All the hubbub in oil circles this week has been about Chevron Corp.'s announcement of a new CEO to replace the retiring John Watson (longtime pipeline and refining executive Mike Wirth). But its rival Exxon Mobil Corp. was involved in a couple of deals announced on Wednesday that could help it make some headway in replacing its reserves and boosting its production down the road.

The integrated oil and gas giant said Wednesday it bought more oil and gas properties in West Texas' and New Mexico's Permian Basin, adding to its existing 6 billion barrels of oil equivalent in the area.

While Exxon Mobil was scant on details, including the name of the sellers and the price it paid, it did say it picked up 22,000 net acres in the Delaware and Midland basins through asset purchases and swaps.

Analysts at Tudor, Pickering, Holt & Co. estimate the properties are worth around $500 million based on the $22,000 per acre Exxon Mobil paid in January for the billionaire Bass family's 250,000 acres in the area, which doubled its size in the basin. "[The] needed scale-up continues and we would expect more," the analysts said.

Exxon Mobil senior vice president Jack Williams said in a statement that the company's leading presence in the Permian, from its production properties to its refining capacity along the Gulf Coast, "positions us well for the future.”

Exxon Mobil claims to be one of the most active companies in the Permian Basin operating 19 drilling rigs, 14 of which are drilling horizontal wells in the Midland Basin where it has added 200 wells since mid-2014. The company also has four rigs drilling horizontal wells in the Delaware Basin, where the company recently drilled its first 12,500-foot horizontal lateral length well. Read Full Article