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Permian production forecast to keep rising despite investor concerns

Published 08/11/2017, 07:57 PM
Updated 08/11/2017, 07:57 PM
© Reuters. Permian production forecast to keep rising despite investor concerns
  • Permian Basin shale production should rise by as much as 300K bbl/day by year-end, according to the Wood Mackenzie consultancy, with oil production from the largest U.S. oil field next year approaching or surpassing the 2.7M bbl/day mark.
  • The strong outlook comes as investors sold off shares in a range of Permian producers after Pioneer Natural Resources (NYSE:PXD) earlier this month reported a surprise increase in gas production at its Permian wells, even as its oil output remains on the track with the expectations of its engineers; Parsley Energy (NYSE:PE) also reported additional gas output alongside oil volumes it said were in-line with forecasts.
  • Noting that wells tend to produce more natural gas as they age, Morgan Stanley (NYSE:MS) analysts say the phenomenon has been hard to see in the Permian as companies have been growing at a breakneck pace, drilling new wells that are flush with oil.
  • “We think it's execution risk that's the culprit” behind investor concerns, says RBC analyst Scott Hanold. “The Permian is going to have some growing pains.”
  • Other top Permian producers include CXO, XEC, EOG, DVN, NBL, XOM, CVX, OXY, WPX, RSPP, APC, APA, FANG, SM, EGN, MTDR, QEP, ECA, CPE, LPI
  • Now read: Apache Corp .: A Buying Opportunity

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