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Permian Powerhouses: 3 Oil Stocks to Watch Closely in 2025
CVXChevron(CVX) ZACKS·2024-12-19 14:31

Permian Basin Overview - The Permian Basin produces approximately 47% of US crude oil and 8% of global supply, with a record-breaking production of 6.3 million barrels per day (bpd) in Q3 [1] - Goldman Sachs forecasts an additional 270,000 bpd growth by 2026, following a 520,000 bpd increase in 2023 [3] - The Energy Information Administration (EIA) predicts US crude production will reach 13.2 million bpd in 2024 and 13.5 million bpd in 2025, with the Permian Basin leading the growth [3] Strategic Advantages - The Permian Basin benefits from record-breaking rig productivity and proximity to Gulf Coast refineries and export terminals, providing a strategic advantage [4] - Ongoing infrastructure improvements ensure the basin remains a cornerstone of US energy production for years to come [4] Key Players in the Permian Basin - ExxonMobil, Diamondback Energy, and Chevron are major players leveraging the Permian Basin's potential to create shareholder value [2][5] ExxonMobil - ExxonMobil's 59.5billionacquisitionofPioneerNaturalResourcesextendsitsPermianBasinreserves,ensuringaproductionrunwayofover15yearsatalowsupplycostof59.5 billion acquisition of Pioneer Natural Resources extends its Permian Basin reserves, ensuring a production runway of over 15 years at a low supply cost of 35-40perbarrel[6]−TheacquisitiondoubledExxonMobil′sproductioncapacityintheregionto1.3millionbarrelsofoilequivalentperday(MMBOE/d),exceeding1.4MMBOE/dinQ32024[6]−Thecompanyaimstoexpandproductionto2MMBOE/dby2027,positioningitselfforsustainedgrowthinoneofthemostprofitableoilbasinsglobally[6]DiamondbackEnergy−DiamondbackEnergyfocusesontheWolfcamp,Spraberry,andBoneSpringformations,leveraginginnovativetechnologiesandstrategicmergers[7]−TheacquisitionofEndeavoraddednearly1millionacresinthePermianBasin,increasingproductioncapabilitiesto850,000barrelsofoilequivalentperday,withcrudeoilcomprising5640 per barrel [6] - The acquisition doubled ExxonMobil's production capacity in the region to 1.3 million barrels of oil equivalent per day (MMBOE/d), exceeding 1.4 MMBOE/d in Q3 2024 [6] - The company aims to expand production to 2 MMBOE/d by 2027, positioning itself for sustained growth in one of the most profitable oil basins globally [6] Diamondback Energy - Diamondback Energy focuses on the Wolfcamp, Spraberry, and Bone Spring formations, leveraging innovative technologies and strategic mergers [7] - The acquisition of Endeavor added nearly 1 million acres in the Permian Basin, increasing production capabilities to 850,000 barrels of oil equivalent per day, with crude oil comprising 56% [7] Chevron - Chevron's Q3 2024 performance benefited from record production in the Permian Basin, contributing to a 7% year-over-year increase in worldwide oil-equivalent production [8] - The company plans to invest 4.5 billion to $5 billion in the Permian Basin next year, demonstrating its ability to capitalize on vast reserves and optimize output [8]