TOP 2022 vs 2023 Permian Producers Overview by Rextag

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Turn Back to 2022

The year 2022 brought new opportunities to the U.S. economy in various domains that had not been fully developed. Oil and natural gas production facilitated economic growth, especially in the Permian Basin.

Compared with other U.S. basins, the Permian Basin derived benefits from lower operational costs, better access to oilfield services, and its proximity to U.S. Gulf Coast refineries and export facilities. The core areas of the Permian Basin, including its Delaware and Midland sub-basins, consisted of multiple stacked shale formations.

According to the U.S. Energy Information Administration (EIA), oil output in the Permian in Texas and New Mexico, the largest U.S. shale oil basin, was predicted to grow by almost 50,000 barrels per day (bpd) to a record 5.453 million bpd in November 2022.

In 2022, the total production was 1.6 billion MCF for gas and 507 million BBL for oil. The monthly average production in the Permian Basin was 4,236 MCF for gas and 1,127 BBL for oil.

The list of the top 5 Permian producers included Pioneer, Windsor, EDG, OXY, and ExxonMobil.

Rextag`s info showing Top H1 2022 Permian Producers

At that time, OXY had the most significant number of wells (10,388) that were delivering steady production to domestic and foreign customers. Other top producers operated roughly twice as few wells (4,000-6,000).

In 2023, strong production growth from the Permian basin was anticipated, generating a first-half 2022 average crude oil production of 5.02 million b/d, a growth of 13.6% year-over-year. Constant supply chain bottlenecks, shortages of qualified personnel, and a fluctuating drilled-but-uncompleted (DUC) well inventory could have dampened overall expectations, but the play focused on many US shale operators.

TOP 2023 Permian Producers Update

In 2023, the Permian Basin made up 46% of the U.S.'s oil supply. Other tight oil areas contributed an additional 22%. The remaining 32% came from traditional and offshore oil sources, which haven't grown in the last 15 years.

In November 2023, the Permian Basin hit a new high in natural gas production, with an average flow of 6.3 billion cubic feet per day.

According to Wood Mackenzie, investments in the Permian Basin reached over $100 billion in 2023 (a previous high of $65 billion in 2019).

Rank	Operator	Average Q2 2023 Gross Operated Production (BOE/D)
1	PIONEER NATURAL RESOURCES	816,725.07
2	EOG RESOURCES	656,222.61
3	CONOCOPHILLIPS	606,318.73
4	OCCIDENTAL PETROLEUM	586,244.26
5	EXXON	583,679.87
6	DIAMONDBACK ENERGY	496,397.16
7	DEVON ENERGY	472,515.53
8	CHEVRON	388,028.49
9	MEWBOURNE OIL CO	363,613.05
10	ENDEAVOR ENERGY	319,008.02

Top 10 Permian Basin Operators for Q2 2023

The merger between Exxon Mobil and Pioneer Natural Resources was valued at $60 billion and announced in October. Post-merger, Exxon Mobil's production in the Permian is expected to increase to around 1.3 million barrels of oil equivalent per day, positioning it as the top producer in the region.

Exxon Mobil has set a goal to expand its Permian production to 2 million barrels of oil equivalent per day by 2027, up from an initial target of 1 million.

Occidental Petroleum is also deepening its presence in the Permian with a $12 billion acquisition of CrownRock. In August 2023, OXY ranked as the third-largest producer in the Permian Basin.

In 2023, Civitas Resources made a step into the Permian Basin, investing nearly $7 billion. They entered by buying two companies, Tap Rock Resources and Hibernia Energy III, which are active in the Permian's Midland and Delaware areas.

Civitas didn't stop there; they also bought Vencer Energy, a company in the Midland Basin, for $2.1 billion in October. This company was supported by Vitol.

In another big deal in 2023, Permian Resources spent $4.5 billion to buy Earthstone Energy. This added valuable locations and increased their production in the Midland Basin.

Ovintiv also made a major purchase in the recent year, spending $4.275 billion on three companies in the Midland Basin, all backed by EnCap Investments.

Endeavor Energy Partners, another key player, is doing well in the Midland Basin's central area. According to a Fitch Ratings report from November, they're producing 331,000 barrels of oil equivalent per day, which is a 25% increase from 2022.

Permian Basin Rigs 2023

In the Permian Basin, there was a shift in drilling rigs during 2023: the Delaware Basin lost 3 rigs while the Midland Basin gained 1. The total U.S. rig count remained unchanged week-over-week at 595 rigs. Specifically, Chevron, Permian Resources, and Matador Resources each removed one rig from the Delaware Basin, and Exxon Mobil added a rig in the Midland Basin.

Despite a decrease in rigs throughout the year, the Permian Basin's oil supply continued to rise. The overall rig activity in West Texas and New Mexico dropped by 49 rigs, a 14% decrease, ending the year with 302 rigs compared to 351 at the end of 2022. This was the lowest rig count since January 2022, when the basin's oil production was at 4,977 million barrels per day (Mb/d).

The decrease in rig counts was also influenced by M&A. Private operators saw the most significant decline, with a 33% reduction in their basin rig counts in 2023. Drilling activities by these private operators decreased by 17% in the Delaware Basin and 36% in the Midland Basin.

Permian Basin Infrastructure 2023

Despite these challenges, the Permian Basin's crude oil production increased by 10% in 2023, reaching a new record high. By the end of the year, oil production had risen to 6,185 Mb/d, up by 560 Mb/d from the end of 2022, when it was 5,625 Mb/d. This growth occurred even as rig activity trended downward, highlighting the basin's efficiency and productivity improvements.

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12/23/2024

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