Permian integrated value chain

With our large acreage position in the Permian Basin, an advantaged midstream position, and world-scale refining and chemicals assets on the U.S. Gulf Coast, ExxonMobil is uniquely positioned to extract maximum integrated value from this world-class basin.

Report April 2, 2019

In this article

Permian integrated value chain

Permian oil and gas deposits

(not to scale)

Permian acreage is comprised of multiple, economic, stacked pay zones, with much of our acreage offering profitable production at less than $35 per barrel.

Resource value

ExxonMobil is a leading producer and leaseholder in the Permian, with 1.8 million net acres across the Delaware and Midland basins, and the Central Basin Platform. Our acreage is highly attractive with an estimated 9.7 billion oil-equivalent barrels of net recoverable resource and is comprised of at least 14 highly prolific unconventional pay zones, with additional reservoirs being evaluated.

ExxonMobil finished 2018 as the most active operator in the Permian, with 44 total drilling rigs at year end, up from 21 at the end of 2017. Net Permian production averaged 172,000 barrels of liquids per day and 227 million cubic feet of natural gas per day in 2018, which included a two-fold increase in Permian tight-oil production by year end. We expect production to exceed 1 million net oil-equivalent barrels per day by 2024.

Unconventional expertise

XTO Energy, a subsidiary of ExxonMobil focused on unconventional resource developments, is a leader in unconventional production, with more operated horizontal wells than any other company at more than 6,600 wells. This provides significant expertise and knowledge advantage in the Permian. We are combining this with ExxonMobil’s project management and development planning skills to approach resource development with a bulk-manufacturing, large-scale mindset. Our operated contiguous acreage position allows us to seek capital-efficient solutions, taking advantage of longer laterals, “design-one-build-many” facilities, and utility corridors. Our ability to learn, adjust, and optimize resource recovery will enhance overall value generation.

Net production of Permian(1) and Bakken Basins

(1) Midland and Delaware basins

Applying digital technology

We are collaborating with Microsoft and other vendors offering specialty digital products that we anticipate will increase production in the Permian through improved recovery and reduced downtime. We expect these digital products will support creation of significant value through more efficient development and operations. We are utilizing an integrated cloud computing environment to collect real-time data securely and reliably from oil field assets that span hundreds of miles. These data enable us to make informed decisions on drilling optimization and well completions, and prioritize operator deployment at greater speeds.

Active drilling operations at Remuda area pads in the Delaware Basin demonstrate our ability to simultaneously drill multiple, adjacent wells in different directions. The use of common infrastructure for production from these wells will minimize surface footprint.
This Delaware Basin tank battery includes multiple facility improvements aimed at emissions reduction. For example, installing tanks with higher-pressure ratings enables vapor recovery units to capture additional methane.

Sustainable operations

We are focused on establishing a long-term, sustainable operation in the Permian. The objective is to consistently conduct operations in a safe, environmentally responsible manner.

In 2017, we implemented an enhanced methane management program to mitigate emissions. For example, higher-pressure-rated tanks and vapor recovery towers increase methane capture within our facilities. Additionally, we use the best low-emitting valve position controllers in the industry, and we power them with compressed air instead of natural gas.


Manufacturing development approach

Use of standardized facilities improves execution efficiency and maximizes operational flexibility. Facilities are connected through common corridors that contain oil, water, and gas pipelines, as well as utilities. By utilizing modular and repeatable facility designs, we are able to install infrastructure quickly to support operations and move equipment between different sites.

Targeting 15% reduction in global methane emissions by 2020

Through the program, we made progress in reducing methane emissions across our U.S. operations, contributing to ExxonMobil’s 2020 emissions performance improvement measures, which include a 15-percent decrease in methane emissions and a 25-percent decrease in flaring, compared with 2016.

Another key area of focus is responsible stewardship of the area’s most precious resource: water. We are building an integrated water management system that will efficiently move water across our acreage and enable recycling and reuse of produced water. In our New Mexico operations, we recycle a portion of the water produced from wells and utilize it to support drilling and completion activities.

Connecting the value chain

Connectivity between our Upstream, refining, and Chemical operations allows us to extract additional value through enhanced understanding of the market, application of proprietary technologies, and capture of economies of scale. We are investing in the development of midstream infrastructure, as well as expansions to Downstream facilities on the U.S. Gulf Coast to secure maximum value, regardless of where it is realized across the value chain.

To further support integration, we have committed more than $2 billion to develop crude terminals, crude pipelines, and natural gas pipelines. Expansion of our Wink terminal in Texas will increase the capacity to transport light-crude production. Development of ExxonMobil’s network of pipelines will provide production security and connectivity to our U.S. Gulf Coast manufacturing sites. These investments remove constraints for equity production, enabling rapid development of our acreage in the Upstream, and create additional value capture in our midstream operations.

In anticipation of significant industry growth in Permian production, we are also increasing our capacity to upgrade light crudes with fuel, lubes, and chemical infrastructure projects domestically and internationally. For example, an expansion at our Beaumont refinery will increase light-crude processing capacity by 250,000 barrels per day, while also expanding production capacity for higher-value products.


From the lab to the field

Extensive in-house laboratories focus on studying the complex physical mechanisms that drive optimal reservoir performance in unconventional assets. We leverage advanced imaging techniques such as nuclear magnetic resonance (NMR) and X-ray microtomography (XMT) to study the impact of pressure drawdown on rock permeability and ultimate recovery. We integrate insights from these experiments using extensive mathematical modeling to achieve continuous improvement in the field.

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