ExxonMobil sees its US Permian Basin production growing 25% during 2022, about the same amount of ramp-up as last year, the company's top executive said Feb. 1.
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The company also narrowed its capital budget range to $21 billion-$24 billion, CEO Darren Woods said during a fourth-quarter 2021 earnings call. That was down from a broader $20 billion-$25 billion targeted in a December statement for not only 2022 but through 2027.
Permian Basin production totaled 460,000 boe/d in 2022, up about 100,000 boe/d or 28% year on year prompted by drilling and completions improvements.
"This not only adds to volumes, its adds to free cash flow generation at ExxonMobil," Credit Suisse analyst Manav Gupta said in a Feb 1 investor note.
Woods said the company plans to grow that output "with a very tight control on capital ... setting up more of a manufacturing approach, driving efficiencies and driving technology applications into that."
"[That] allows us to bring barrels to market at a very low cost. And that's going to be an important part of the equation, maintaining that low-cost, high-value operation," he said.
Also, ExxonMobil expects to eliminate routine flaring at its Permian assets in 2022 as part of its plan to get that operation to net zero by 2030, Woods said, adding other "building blocks" for the Permian net-zero plan include upgrading and electrifying equipment, eliminating methane leaks and use of low-carbon renewable power.
Produced 3.7 million boe/d in 2021
In 2021, ExxonMobil's total company-wide production averaged 3.7 million boe/d of liquids and natural gas, down about 1% on an absolute basis but up 2% year on year excluding entitlement effects, divestments, and government mandates. The positive growth was driven by demand recovery.
That 2% growth level for total company output should continue this year, Woods said.
"I would expect that  volumes are fairly consistent with what we've seen this year," he said. "But the mix within that volume profile will continue to improve and the earnings per barrel will continue to improve."
In Q4, ExxonMobil's total liquids and gas production averaged 3.816 million boe/d, up 4% sequentially and up 3% year on year. Excluding entitlement effects, divestments, and government mandates, oil-equivalent production rose 2% versus the prior-year quarter, the company said.
Liquids for Q4 averaged 2.385 million b/d, up 3% sequentially and up 2.5% year on year. Natural gas for Q4 totaled 8.584 Bcf/d, up 6% sequentially and up 5% year on year.
US liquids averaged 770,000 b/d, up 1.5% sequentially and up up% year on year.
Eyes 15% lower oil breakeven price
In addition, the company's Brent breakeven oil price to $41/b in 2021 and targets an average $35/b by 2027, down 15%.
The biggest driver of the improvement is upgrading the mix across the portfolio, driven by higher volumes of low cost-of-supply barrels in upstream and growth of high-value products in its downstream and chemicals business, ExxonMobil Chief Financial Officer Kathy Mikells said.
Late Jan. 31, ExxonMobil said it would relocate its corporate headquarters from Irving, Texas to its Houston area campus in mid-2023. This will enable closer teamwork and facilitate value delivery.
The company said it would reorganize its existing operations into three business lines: ExxonMobil Upstream Company, ExxonMobil Product Solutions – which will consolidate the company's downstream and chemicals businesses – and ExxonMobil Low Carbon Solutions, effective April 1.
The new business structure, plus actions such as centralizing procurement, digital transformation of processes and right-sizing programs announced in 2020, should yield more than $6 billion in structural cost savings by 2023 versus 2019, Woods said. He added the company's nearly $2 billion of structural efficiencies in 2021, on top of $3 billion the year before, "puts us in a good position to significantly exceed" the $6 billion target.
ExxonMobil posted Q4 2021 earnings of $8.9 billion or $2.08/share, compared to a net loss of $20 billion or $4.70/share during the same period in 2020.