ExxonMobil's Permian Push: Here's What Investors Should Know

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. These advantaged assets are characterized by lower emissions, lower cost of production and higher returns.

In the Permian Basin, the company has achieved record production levels of 1.8 million oil-equivalent barrels per day in the fourth quarter. On its latest earnings call, the company mentioned that it has been using a new lightweight proppant for its wells, which can penetrate deeper into fracs, improving the efficiency of the hydraulic fracturing process and enhancing recovery rates. In 2025, this proppant had been deployed to 25% of the wells, and the company plans to extend this to 50% of new wells in 2026. Interestingly, the company highlights that it does not see a near-term peak for Permian production. Rather, it intends to continue the production growth in the Permian Basin. 

XOM is leveraging innovation and technology to improve production from the Permian Basin. The company plans to increase Permian production volumes to 2.5 million oil-equivalent barrels a day beyond 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 for shareholders.

Growing Permian Production: COP and CVX

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 Corporation 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 34.2% over the past year compared with the 23.8% 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 9.43X. This is above the broader industry average of 5.72X.

The Zacks Consensus Estimate for XOM’s 2026 earnings has seen upward revisions over the past seven days.

XOM currently carries a Zacks Rank #3 (Hold) while CVX and COP have a Zacks Rank #4 (Sell). 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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