ExxonMobil: Oil to account for most new production in 5 years

Paula Dittrick
OGJ Senior Staff Writer

HOUSTON, Mar. 17 -- ExxonMobil Corp. expects to add nearly 1.4 million boe/d net to its production by 2016, and oil will account for 80% of that new production, company executives recently told analysts in New York.

“There is no bias for us one way or the other,” ExxonMobil’s Chairman and Chief Executive Officer Rex Tillerson said of the company’s oil-gas production ratio. “Our bias is to make money.” During 2010, ExxonMobil’s overall production was 54% oil. Total 2010 average production was 4.5 million boe/d.

ExxonMobil plans to deliver 120,000 boe/d net in 2011 from 2010 project startups. The company’s average reserve replacement unit cost during 2005-09 was $8/boe. Proved reserves equal 24.8 billion boe, up 8% from 2009.

“Our ability to replace more reserves than we produce at attractive unit cost positions us to continue to deliver profitable volume growth in the future,” Tillerson said.

During 2012-13, Tillerson expects 10 projects will come on stream, including 2 projects in Angola, 3 in Nigeria, 1 oil sands project in Canada, the first phase of Kashagan oil field development in Kazakhstan, and the Kipper-Tuna gas project in Australia’s Gippsland basin.

Unconventional production plans
Andy Swiger, ExxonMobil senior vice-president, said the company’s unconventional resources account for more than 40% of the company’s total 84 billion boe resource base. This includes heavy oil and oil sands, gas and oil shales, coalbed methane reservoirs, and tight gas sands across about 6 million acres from northern Canada to South Texas.

Two of ExxonMobil’s fastest-growing gas shale plays are the Haynesville of East Texas and the Fayetteville of Arkansas.

ExxonMobil is running 13 rigs in the Haynesville to delineate its 240,000 net acre position. During 2010, gross operated production increased more than fourfold to 240 MMcfd.

“We have also successfully completed our first wells targeting the overlying Bossier shale,” Swiger said.

In the Fayetteville, ExxonMobil reported 2010 yearend production of 210 MMcfd of gas. A 9-rig program is delineating acreage and accelerating pad drilling across 550,000 acres where multiple pilots are under way.

ExxonMobil has 410,000 net acres in the Bakken formation of Montana and North Dakota. Seven rigs drilled wells in the Three Forks and the Bakken as of Mar. 9, Swiger said. During 2010, ExxonMobil drilled 63 Bakken wells.

In the Eagle Ford, Exxon holds 120,000 acres where it drilled 15 wells in 2010, focusing on the gas, condensate, and oil windows.

“We are delineating this acreage using two rigs, while leveraging our existing south Texas transportation and processing inventory infrastructure, Swiger said. “Our position in the Bakken and the Eagle Ford development is enhanced by our vast experience and substantial operations in the liquids-rich Permian basin where we hold 470,000 acres prospective for a number of emerging liquids-rich plays.”

Exxon continues to build positions in numerous other liquids-rich plays across the US and Canada, he said.

Contact Paula Dittrick at paulad@ogjonline.com.

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