Company plans to spend about a fourth of its 2017 budget drilling in Texas, New Mexico and North Dakota, tapping a vast inventory of wells
Exxon Mobil Corp. on Wednesday outlined an ambitious plan to turn to prolific U.S. shale basins for growth, showcasing how the oil giant now sees American production as a key to its future.
The company plans to spend about a fourth of its 2017 budget—about $5.5 billion—drilling in Texas, New Mexico and North Dakota, tapping a vast inventory of wells that can turn a profit at a price of $40 a barrel.
The U.S. increasingly appears at the center of a burgeoning global revival after prices rebounded modestly and companies such as Exxon have improved in their ability to profit due to lower costs and feats of engineering.
Yet unlike some peers that plan to keep investment roughly flat in future years, Exxon plans to increase spending to an average of $26 billion a year from 2018 to 2020. The company plans $22 billion in investments this year.
“Our job is to compete and succeed in any market, irrespective of conditions or price,” new Chief Executive Darren Woods said at Exxon’s analyst meeting in New York. It is his first major appearance since taking over for Rex Tillerson, who stepped down to become President Donald Trump’s secretary of state.
“The ultimate prize in the Permian is significant,” he said, noting that the land the company controls in the West Texas and New Mexico oil region may hold the equivalent of as much as 6 billion barrels of oil and natural gas. The company also plans to invest in Guyana, where it made a major discovery in 2015.
He also warned that because shale drilling has the ability to ramp up more quickly than other kinds of production, it has the potential to “temper” price volatility.