U.S. oil production to hit record high in 2024 with Exxon, Chevron boost

by | Dec 14, 2023 | United States, Crude, OPEC, Production

Exxon Mobil and Chevron’s shift in strategy to allocate about half of their generated profits towards dividends and buybacks signals a focus on returning value to shareholders.

U.S. Oil Production to hit record high in 2024 with Exxon, Chevron boost

INTRODUCTION

For oil and gas investors, the projected record-high U.S. oil production in 2024, driven by Exxon Mobil and Chevron, can be seen as a positive development for several reasons:

Increased Revenue and Profits:

  1. Higher oil production generally leads to increased revenue for oil companies. As Exxon Mobil and Chevron boost their investments in shale resources, it is expected to result in higher production levels, contributing to enhanced financial performance. This, in turn, can potentially translate into higher profits for these companies.
  2. Dividends and Buybacks:

    Exxon Mobil and Chevron’s shift in strategy to allocate about half of their generated profits towards dividends and buybacks signals a focus on returning value to shareholders. For investors, this means the possibility of receiving dividends and benefiting from share buybacks, both of which can enhance shareholder returns.

  3. Consolidation Trend:

    The mega-mergers with prominent shale producers indicate a consolidation trend within the industry. Such consolidations can lead to operational synergies, cost savings, and improved efficiency, which are generally positive factors for investors.

  4. Market Stability:

    The article suggests that OPEC+ is unlikely to flood the market to challenge U.S. shale’s profitability. Instead, they are expected to rely on supply-demand fundamentals to maintain stable crude prices. For investors, a stable market reduces the risk of price volatility and uncertainty, providing a more predictable environment for investment decisions.

  5. Global Influence of U.S. Energy Markets:

    The anticipated rise in U.S. oil production underscores the country’s growing influence on global energy markets. For investors, this signals the potential for U.S. oil companies to play a significant role in meeting global energy demand, providing opportunities for international market participation.

  6. Adaptation to Changing Dynamics:

    The strategic moves by major players like Exxon Mobil and Chevron to adapt to changing market dynamics and shareholder expectations demonstrate a proactive approach. Investors often value companies that can navigate evolving industry conditions and align their strategies with shareholder interests.

CONCLUSION

It’s important to note that the benefits for investors are contingent on various factors, including global oil demand, geopolitical developments, and regulatory changes. Investors should carefully assess these factors and conduct thorough due diligence before making investment decisions in the oil and gas sector.

NEW UPDATE: March 9, 2024

 

technical analysis update

March 9, 2024 Update

Surging U.S. Oil and Gas Output Suppresses Prices

U.S. Oil and Gas Production Hits Record High in December

In a recent report by the U.S. Energy Information Administration (EIA), December marked a milestone for the U.S. oil and gas industry as it achieved new seasonal production records. Despite a dip in prices from mid-2022 levels following geopolitical events like Russia’s invasion of Ukraine, production continued its ascent, contributing to inventory buildups.

The data reveals that crude and condensates production reached 413 million barrels in December, up from 376 million in the same period of 2022. December’s daily production averaged 13.3 million barrels, reflecting a remarkable 10% increase compared to the previous year. It’s important to note that the extreme cold in December 2022 impacted the year-on-year comparison due to well freeze-offs.

For the entire year of 2023, the U.S. saw a substantial increase in output, reaching 4,721 million barrels, a notable uptick from 4,347 million in 2022, effectively doubling since 2012.

Despite the rise in production, inflation-adjusted U.S. crude futures averaged $72 per barrel in December, down from the peak of $121 in June 2022. The decline in oil prices prompted a slowdown in oil-directed drilling, with a typical lag of about five months in response to market shifts. Oilfield services company Baker Hughes reported a drop in the average number of rigs drilling for oil, from 623 in December 2022 to 501 in December 2023.

However, the production efficiency remained resilient, with drilling operations focusing on high-potential sites and optimizing the process. Horizontal well sections became longer, enhancing reservoir contact and enabling more efficient oil recovery from each well.

This update highlights the industry’s ability to adapt to market dynamics, maintaining robust production levels despite changing economic conditions and geopolitical events.

experienced operators major operators

Why Qualified Investors Choose Experienced Operators

Get access to your Investment Guide today to learn more about direct participation in oil and gas exploration.

You have Successfully Subscribed!