Mozambique seems like a maybe at best. PNG expansion projects have poor economics or would have already happened. Darren seems to be ki-ling the future of the company so he can loot it now and fill his pockets. Serious question - what is there besides Permian and Guyana?
9 replies (most recent on top)
Even as Guyana progresses they are looking to slow down expating and fulfill roles with more locals. Guyana will not be a go-to for long. Second, it is a PDS ki-ler so be wise. You can definitely make good money and have more freedom than other locations but be smart about the role you choose if you have alot of time left in your career.
Upstream Commercial is going to save us with some big new acquisition. Then we will just revise our plans upward as we PIP our way to greatness.
Seriously, DW and KM and the rest don’t even know what business we are in. The village id--t can cut costs and outsource to improve the bottoms line, but it takes a real oilman to grow the top line.
So many changes for the worse over the decades, but the biggest change is that every employee used to have a fire lit under their ar-e to keep finding oil to grow production and reserves. Now nobody cares. As long as the Permian and Guyana can carry me to my personal RE date, why should I care?
Crickets. So OP is correct. Darren is looting the company and it will collapse soon without any new upstream finds.
U.S. oil firms facing slowest Permian oil output growth since pandemic, with costs rising too
Crude oil futures gained for a third straight week, as U.S. sanctions against Iranian and Venezuelan oil raised some near-term supply concerns, even with OPEC+ due to start unwinding some production cuts next week.
President Trump's decision to impose a 25% tariff on any country that buys oil or gas from Venezuela and fresh sanctions targeting Chinese refineries processing Iranian crude pushed oil prices higher, but uncertainties over the demand outlook persist due to mounting global trade tensions, after Trump imposed 25% tariffs on all imported cars and trucks and prepared to announce reciprocal tariffs on U.S. trading partners next week.
"Oil prices have been caught in a tug of war between tariff measures, pulling Brent to the downside, and sanctions measures, pushing it to the upside," analysts at Fitch's BMI research unit wrote.
"The key theme this week was the Trump administration ratcheting up the pressure on the Maduro regime in Venezuela," Barclays analyst Amarpreet Singh said.
"We are approaching overbought technical territory, but if there are consecutive closes above longer-term moving averages, we could be set for a higher move in Q2," Alex Hodes of StoneX said, adding Q2 is expected to be tighter than originally thought, "and if there are reductions in Venezuelan or Iranian crude oil barrels on the market this would certainly be a bullish development."
Front-month Nymex crude (CL1:COM) for May delivery finished +1.6% to $69.36/bbl this week, and front-month May Brent crude (CO1:COM) closed +2% for the week to $73.63/bbl, the third consecutive weekly gain for both benchmarks; on Friday, front-month WTI and Brent fell 0.8% and 0.5% respectively.
U.S. natural gas futures (NG1:COM) finished the week back above $4, as forecasts added some colder air into the northern U.S. for early next week, which should briefly lift demand; the Nymex May front-month contract ended +1% for the week after gaining 3.6% on Friday to $4.065/MMBtu.
U.S. oil producers are coping with geological limits to production growth in the Permian Basin, as the top domestic oilfield ages and produces more water and gas and less oil - and may be nearing peak output.
The Permian is pumping 6.5M bbl/day, a record level and nearly half the all-time high 13.5M bbl/day of crude produced in the U.S. during December, but relentless drilling has exhausted the core of the Permian's two largest sub-basins: Nearly two-thirds of the Midland formation's core has been drilled, and slightly more than half in the Delaware formation, according to data from analytics software company Novi Labs.
The U.S. estimates Permian production growth of ~350K bbl/day this year, which would be the smallest increase since the COVID-19 pandemic.
The Permian is getting more expensive too, producing more water per barrel of crude than other U.S. shale basins; at a four-to-one water-to-oil ratio, water disposal costs translate to ~$2 for each barrel of oil produced in the basin, and breakevens to drill a new well in the Permian averaged $65/bbl in 2024, up $4 on the year, according to the Federal Reserve Bank of Dallas.
Energy stocks, as represented by the Energy Select Sector SPDR Fund (NYSEARCA:XLE), finished roughly flat on the week.
https://www.msn.com/en-us/money/markets/u-s-oil-firms-facing-slowest-permian-oil-output-growth-since-pandemic-with-costs-rising-too
But all the production and drilling pds events coming from the pioneer purchase. What a poorly ran company. Sups and managers just protecting themselves and their minions. Departments that barely provide value. People struggling within those. Can’t wait till it’s over.
Permian will be ran into the ground far sooner than we expect
Permian will be on the decline in less than 10 years.
The world’s largest oil basin, known as the Permian, lies in the southwestern US, and it accounts for all of the growth in US crude oil production since 2020. Last year, US production exceeded expectations, with crude production growing by more than 1 million barrels per day.
US annual average supply growth, while declining to 0.5 million barrels per day this year, is still expected to drive 60% of non-OPEC production growth, according to Goldman Sachs Research. Our analysts’ price forecast for West Texas Intermediate oil, for 2024/2025, is $79/$76 per barrel (compared with the WTI oil price of about $80 as of July 17).
Goldman Sachs Research expects technological and efficiency gains to keep driving growth in Permian production. But the Permian is maturing, and its deteriorating geology will weigh on the production of crude oil down the road. The number of oil rigs in the Permian, and more broadly in the US, is declining, down at present to its September 2023 level. Permian crude production growth will likely slow to 6% this year and to 4% in 2026.
How much oil does an oil well produce?
In the life cycle model of a typical Permian oil well, “production usually peaks a month after the start of production but declines fast afterwards to modest and roughly flat production in three-four years,” Yulia Grigsby, an energy economist in Goldman Sachs Research, writes. The annual average production growth in the maturing Permian basin is likely to gradually decline from an exceptionally strong 520,000 barrels per day in 2023 to 340,000 barrels per day this year, and to a still robust 270,000 barrels per day in 2026.
There are two key reasons for the Permian’s slowing growth:
Geology: Years of intense exploration and production have had an impact on the rock quality of the basin, leading to geological deformations that limit further improvements in the productivity of oil wells. The most productive wells are also getting depleted. This weighs on the initial production of new wells.
Goldman Sachs Research expects the initial production of wells to rise by 100 barrels per day this year but forecasts a slowdown in growth to 50 barrels per day in 2025-2026 – only a third of the growth seen in 2019.
Rigs: The Permian weekly rig count has dropped nearly 15% from last year’s April high, and is down 30% from its 2018-2019 average. Goldman Sachs Research expects that trend to continue this year. The rig count will likely keep edging downwards, from 309 today to fewer than 300 by the end of 2026. But output per rig will keep growing, as industry consolidation increases the share of more productive rigs, and as technologies improve.
What is the future of US crude oil?
Although slowing, the growth of Permian production will remain robust through 2026. Goldman Sachs Research identifies two chief reasons for this:
Efficiency: “Drilling and completion efficiency continues to improve via lower drilling costs and shorter drilling and completion times,” Grigsby says. “This year, every stage of a well’s building cycle in the Permian was 20-50% faster than in 2019, with the total average time from rig to production decreasing by a third to 63 days.” This acceleration will boost the share of new and productive wells amid the stock of declining wells.
Price forecasts: Goldman Sachs Research’s price forecast for West Texas Intermediate oil, for 2024/2025, is $79/$76 per barrel, which is modestly above our analysts’ estimate of $74 per barrel as the breakeven price of Permian oil.
Permian oil exhibits a differential sensitivity to global oil prices. When WTI prices remain above $50 per barrel, a 10% drop in price leads to only a modest average drop of 1.3% in Permian production. If WTI prices are below $50 per barrel, though, that same 10% drop in price triggers a much larger drop of 4% in Permian production. Given Goldman Sachs Research’s forecast of the price of oil, which is well above the $50 threshold over the next 18 months, price swings are unlikely to spark deep cuts in Permian production.
https://www.goldmansachs.com/insights/articles/biggest-oil-basin-headed-for-slower-robust-growth
Exploration budget slashed. They are doing what they can with some success in Cypress and Egypt but exploration clearly isn’t a priority to Darren. He doesn’t seem to understand we are in a depletion business.
Permian wells GOR and WOR is not improving. Cost to dispose of more water for each barrel of oil isn’t going to help the financials! Add to that seismicity issues and Permian has challenges ahead.