charlotte: Their Permian rig count to 14 from 7! It may not sound like much, but I’ll take it! And 1,300 well locations that can make a 10% return at $40/bbl – great! Even just that should keep them busy for a while (and lots of suppliers too!). I think that is really remarkable, in addition to the fact that they are choosing a shorter project cycle. The reason why the leaders in the shale plays have been independents (for the most part) is because they can be nimble and adjust quickly to new field data, etc. If this nimble-ness is spreading to the super-majors, that’s a good thing!
We had a preview of this strategy last fall, and it makes complete sense. Even as capital-intensive as the unconventional operations are, they pale by comparison to the behemoth projects elsewhere around the world (Australian LNG, deepwater in some locations, et al). But perhaps even more important is the fact that the unconventionals reduce certain types of risk in a way that I thought we’d never see! Reduced risk and a higher probability of economic payout, though you have to grab the costs and the budget by the throat and wring the life out of them!
Here’s the article from Fuelfix:
HOUSTON – After years of spending billions of dollars constructing massive oil and gas projects, Chevron Corp. is planning to pivot to more profitable, shorter-cycle investments like its fields in the West Texas shale-oil plays. The No. 2 U.S…
Read full article at the publisher’s site: Chevron pivots from big projects to West Texas shale