As Bloomberg reported, Exxon wants to sell some conventional oil and gas reserves in the Permian Mountains. The proceeds from the potential sale are expected to be around one billion dollars.

In a written response to the publication’s questions, Exxon said the company is “reviewing market interest in select conventional assets in West Texas and southeast New Mexico,” adding: “This decision is consistent with our strategy to continually evaluate our portfolio.”

Bloomberg also cited unnamed sources as saying that the assets to be divested include oil wells in the Central Permian Basin, where production is not particularly high but stable. The divestment is in line with Exxon’s increased focus on shale oil and gas production.

The biggest step Exxon has taken in this direction recently was the $60 billion acquisition of Pioneer Natural Resources, which was completed earlier this year. The completion of the mega-deal significantly strengthened Exxon’s presence in the prolific Permian Basin. This strategic move effectively doubled Exxon’s presence in the region and cemented its position as the dominant player in one of the most prolific parts of the shale basin.

The acquisition gives Exxon access to over 1.4 million net acres in the Delaware and Midland Basins within the Permian Formation. The company forecasts that the combined company will see a significant increase in production to as much as 1.3 million bpd. Looking ahead, Exxon expects further growth. Production is expected to reach an impressive 2 million bpd by 2027, underscoring the long-term strategic value of this acquisition.

Meanwhile, Exxon is considering increasing its total oil production to about 4.3 million barrels a day this year, which would be the highest in a decade, Bloomberg noted in its report on divestment plans for its conventional Permian drilling operations. The Pioneer acquisition will go a long way toward that production increase.

By Irina Slav for Oilprice.com

More top articles from Oilprice.com