ExxonMobil Accelerates Permian Growth, Aims for 2.3M Barrels by 2030

Exxon Mobil Corporation XOM, a U.S. oil and gas giant, generates a significant portion of its revenues from exploration and production activities. The company’s upstream production growth is primarily driven by its major oil projects in two key regions – the Permian Basin and offshore oil and gas resources in Guyana. In the third quarter, the company reached record production levels of nearly 1.7 million barrels of oil equivalent per day (boe/d) in the Permian.

On its latest earnings call, the company mentioned that it has been using low-cost refinery coke as a new lightweight proppant, which can penetrate deeper into fracs, improving the efficiency of the hydraulic fracturing process and enhancing recovery rates. XOM mentioned that this new proppant has improved its well recoveries by almost 20%. The company also announced that it has purchased 80,000 net high-quality acres in the Midland Basin from Sinochem Petroleum in the quarter. The acquisition gives ExxonMobil greater control over drilling locations where it can incorporate its proprietary technologies to drive higher returns.

XOM is leveraging innovation and technology to improve production from the Permian Basin. The company plans to increase Permian production volumes from 1.6 million barrels to 2.3 million barrels by 2030. ExxonMobil’s deep inventory of high-quality acreage in the Permian Basin, combined with the use of newer technologies, is expected to sustain production growth and generate long-term value.

Growing Permian Production: COP and CVX’s Competitive Edge

ConocoPhillips COP and Chevron Corporation CVX are two energy firms with an extensive footprint in the Permian Basin.

ConocoPhillips’ portfolio includes assets in the prolific shale basins of the United States, the oil sands in Canada, and conventional assets in Asia, Europe and the Middle East, which support low-cost production. Notably, in the U.S. Lower 48, COP has an advantaged inventory position that can support operations at a break-even cost as low as $40 per barrel WTI cost. ConocoPhillips’ acquisition of Marathon Oil in 2024 also bolstered its footprint in the Permian Basin, bringing additional high-quality assets.

Chevron has an unmatched portfolio of high-quality assets in the Permian Basin that continues to drive peer-leading organic growth. Increasing production from the Permian has contributed to higher net oil-equivalent production in the third quarter for CVX. Chevron is also the largest mineral owner in the Permian, enabling it to capture royalty benefits. The company's oil and gas fields maintain industry-leading profit margins that should ensure resilience during periods of challenging commodity prices.

XOM’s Price Performance, Valuation & Estimates

Shares of ExxonMobil have risen 7.8% over the past year compared with the 6.5% increase of the composite stocks belonging to the industry.

From a valuation standpoint, XOM trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 7.76X. This is above the broader industry average of 4.85X.

The Zacks Consensus Estimate for XOM’s 2025 earnings has seen four upward revisions over the past seven days.

XOM, CVX and COP each currently carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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