Both Exxon Mobil and Chevron are leaning on the Permian Basin to boost oil output this year, the U.S. supermajors reported in earnings.

Exxon Mobil Corp. and Chevron Corp. are already two of the largest producers in the Permian Basin—the nation’s top oil-producing region. And Exxon is getting even bigger in the Permian through its $64.5 billion acquisition of Pioneer Natural Resources. 

Chevron set a quarterly production record in the Permian during the fourth quarter with an average of 867,000 boe/d, the California-based major reported Feb. 2.

Texas-based Exxon reported Permian output of approximately 610,000 boe/d, exceeding the company’s full-year 2023 guidance of 600,000 boe/d by about 1.6%.

Exxon improved its Permian volumes by about 25,000 boe/d during the fourth quarter, CFO Kathryn Mikells said during the company’s Feb. 2 earnings call.

Darren Woods, Exxon’s chairman and CEO, said the company is planning to grow Permian volumes up to about 650,000 boe/d during 2024.

“We’re going to continue that growth through to the targets that we’ve laid out in 2027—close to 1 MMboe/d,” Woods said on the call.

Exxon aims to organically boost its Permian production to 1 MMboe/d, but the company is also getting a huge production lift through its blockbuster acquisition of Pioneer Natural Resources—another top Permian producer.

After closing the Pioneer deal, Exxon expects its Permian volumes to grow to about 1.3 MMboe/d. Together with Pioneer, Exxon is aiming to raise Permian output up to a whopping 2 MMboe/d.

Exxon Pioneer Acreage Map
Exxon’s acquisition of Pioneer Natural Resources will combine two of the largest producers in the Permian Basin. (Source: Exxon-Pioneer merger presentation)

Chevron has its own plans to raise Permian output by approximately 75,000 boe/d this year.

Chevron’s Chairman and CEO Mike Wirth said the company is starting the year in the Permian with 12 rigs and three frac crews.

“Looking to the year ahead, our program is back-end loaded as we plan to continue to build our DUC inventory before adding an additional completion crew in the second half of the year,” Wirth said during Chevron’s Feb. 2 earnings call.

Chevron plans to exit 2024 with its Permian production at an average 900,000 boe/d; The company still aims to achieve Permian production of 1 MMboe/d in 2025.

Chevron Permian outlook
Chevron aims to raise Permian volumes up to 1 MMboe/d in 2025. (Source: Chevron investor presentation)

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D-J depth

The fourth quarter was Chevron’s first full quarter with its newly acquired Denver-Julesburg (D-J) Basin assets from PDC Energy.

Chevron closed a $6.3 billion takeover of PDC in August.

This year, Chevron plans to grow its D-J Basin production by about 125,000 boe/d by combining its existing footprint in the basin with a full year of legacy PDC operations.

“Our plans are to hold the D-J around 400,000 boe/d going forward,” Wirth said.

Chevron is still working with some legacy PDC well designs—some of which are a bit more tightly spaced than Chevron’s own designs, which prioritize value over production growth, Wirth said.

D-J Basin drilling and completion designs should become more standardized across Chevron’s footprint going forward.

“We’ve got four rigs that are going,” Wirth said. “We’ve got permits out for multiple years, nearly to the end of the decade.”