DENVER— Chevron Corp. plans to pump 1 MMboe/d from its Permian Basin footprint by 2025. But less than a decade ago, the supermajor’s legacy assets in West Texas and New Mexico produced fewer than 100,000 boe/d.
Chevron has more than 2 million net acres in the Permian Basin today, weighted more toward the Delaware Basin than the Midland Basin, CEO Mike Wirth said Aug. 20 during the 2024 EnerCom Denver conference.
“[It’s] legacy acreage that we’ve held for a long time—much of it we hold in fee,” Wirth said. “Virtually all of it has no royalty because we own the minerals on it, as well.”
Relatively speaking, Chevron was late to the U.S. shale game. The company didn’t have holdings in the earlier major shale plays including Williston Basin and the Eagle Ford Shale.
Chevron did have assets in the Marcellus, which it eventually sold to Appalachia gas giant EQT Corp. in 2020.
But Chevron began to develop its legacy holdings in the Permian Basin as horizontal drilling, hydraulic fracturing and U.S. unconventionals were proven out over time.
Chevron’s Permian production averaged 880,000 boe/d during the second quarter. The company anticipates exiting this year at 940,000 boe/d.
By 2025, Chevron plans to boost Permian Basin output up above 1 MMboe/d.
The meteoric rise of Chevron’s “incredible” Permian Basin asset has been “quite remarkable” to see, Wirth said.
“We don’t have million-barrel-a-day assets,” Wirth said. “Our big assets are a few hundred thousand barrels a day—and that’s big by any standard.”
On its quest to 1 MMboe/d, Chevron is chasing ways to boost resource recovery from its tight shale assets in the Permian Basin.
Chevron is gathering field data to consider changes in well completion and fracturing techniques. The company is also piloting different chemicals and “using gas injection and gas lift in different ways” to improve flow in the Permian.
“We still leave a lot of the molecules behind with today’s completion technologies,” Wirth said. “We’d like to find ways to improve recovery and expect we will—we’re working hard on that.”
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Rocky Mountain high
When Chevron acquired Noble Energy for $5 billion in 2020, the supermajor became acquainted with a new U.S. unconventional play: the Denver-Julesburg (D-J) Basin.
Entering Colorado was somewhat of a homecoming for Wirth, who grew up in the Denver area and graduated from Golden High School before attending the University of Colorado.
But Chevron itself didn’t have first-hand experience drilling the D-J Basin when closing the Noble deal.
“As we gained experience, we really liked it—so much that we wanted to scale up in the D-J,” Wirth said.
Chevron grew its Colorado footprint through a $6.3 billion acquisition of D-J Basin producer PDC Energy last year.
Today, Chevron is the largest oil and gas producer in the state of Colorado, where output averages approximately 400,000 boe/d.
“Five years ago, we were not in the D-J,” Wirth said. “It’s one of the top assets by volume in our company now—tremendously important.”
Chevron’s pending acquisition of Hess Corp. would give Chevron a massive foothold in the Williston.
Hess produced an average of 212,000 boe/d from the Williston Basin in the second quarter.
However, most of Hess’ value is attributed to its non-operated position offshore Guyana—and the future of those offshore assets is uncertain.
Chevron has been working through the regulatory process to close the $53 billion Hess acquisition since the deal was announced in October 2023.
A Hess subsidiary, Hess Guyana Exploration Ltd., is currently in arbitration with respect to the right of first refusal in an agreement with Exxon Mobil Corp. and China National Offshore Oil Corp. (CNOOC) regarding the Stabroek Block offshore Guyana.
But the pivotal arbitration hearing concerning Hess’ position in Guyana won’t take place until mid-2025.
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