Permian production forecast to keep rising despite investor concerns By Seeking Alpha
- 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:) 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:) also reported additional gas output alongside oil volumes it said were in-line with forecasts.
- Noting that wells tend to produce more as they age, Morgan Stanley (NYSE:) 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 , , , , , , , , , , , , , , , , , , ,
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