Exxon sets plan to boost oil and gas output by 18%
HOUSTON, Dec 11 (Reuters) - Exxon Mobil on Wednesday said its annual project spending will rise to between $28 billion and $33 billion between 2026 and 2030 as it looks to boost its oil and gas output by 18%.
This follows its acquisition of U.S. shale producer Pioneer Natural Resources.
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The top U.S. oil producer laid out a five-year plan to increase earnings by $20 billion and cash flow by $30 billion to fund its expansion plans for oil and liquefied natural gas (LNG) production and drive shareholder returns.
The new targets come as Exxon is riding high. Its Guyana operations are generating huge profits and U.S. shale business is on track to double oil production this year through its acquisition of Pioneer. In LNG, it is a mixed bag with setbacks in its U.S. and Mozambique projects.
CEO Darren Woods said the increased project spending is expected "to generate returns of more than 30% over the life of the investments."
Exxon aims to more than triple its production in the Permian, the top U.S. shale field, to 2.3 million barrels per day (bpd) by 2030 and pump 1.3 million bpd from its lucrative Guyana operations.
Overall oil and gas output should hit 5.4 million bpd, up about 18% from roughly 4.58 million bpd currently.
The company's shares were down a fraction in pre-market trading to $112.30 with many of the projects and targets already known. Exxon said it will add two projects in Guyana by 2030, in line with a previous statement of 7 to 10 total, while its LNG target remains 40 million metric tons per annum.
The new targets aim to assure shareholders that returns can be sustained through oil market price swings. Global benchmark Brent crude is expected to drop to about $75 per barrel next year from $81 this year, squeezing oil company profits.
But Exxon’s 12.7% year-to-date share gain is well above the sector’s about 8.4% appreciation as measured by energy mutual fund.
Its share-price increase contrasts with from double-digit percentage declines in shares in ConocoPhillips and Occidental Petroleum this year.
(Reporting by Mrinalika Roy in Bengaluru, additional reporting by Gary McWilliams in Houston; editing by Sriraj Kalluvila and Jason Neely)