ConocoPhillips has been emphasizing operational efficiency and modest production growth in the Permian Basin as part of its broader strategy for the Lower 48 region in 2024. The company plans to enhance capital and operational efficiency across its significant operations in the Permian, which includes the Delaware and Midland Basins. These efforts are expected to contribute to a mid-single-digit percentage growth in overall production for the region, primarily driven by activities in the Permian Basin.
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ConocoPhillips Wells Drilled Since 2023
Additionally, ConocoPhillips has successfully integrated assets acquired in the Permian Basin, leading to record production levels in the area. This reflects the company’s focus on leveraging existing positions and applying new technologies to enhance production capabilities. The Permian Basin, with its complex geology, continues to offer substantial opportunities for scale and growth, underscoring its importance within ConocoPhillips’ portfolio.
ConocoPhillips plans to sustain oil production in the Permian Basin while using less capital by focusing on several strategic approaches:
- Operational Efficiency: The company aims to drive efficiencies through its operations. This includes optimizing existing workflows and leveraging technology to maximize production with less expenditure. By refining their operational strategies and focusing on high-return areas within their Permian assets, they can reduce the overall capital required while maintaining or increasing output.
- Economies of Scale: ConocoPhillips’ acquisitions, such as those of Concho Resources and Shell’s Permian assets, provide economies of scale. This larger operational base allows for reduced costs per unit of production through streamlined operations and shared infrastructure, which can be more cost-effective than operating smaller, more fragmented assets.
- Selective Investment: The company is selective in its investments, focusing capital on the most promising and profitable projects. This disciplined approach ensures that funds are allocated to projects that are expected to yield the highest returns, thus maintaining production levels with potentially lower capital outlays.
- Technology and Innovation: ConocoPhillips leverages advanced technologies to enhance reservoir performance and improve recovery rates. The use of digital tools and data analytics helps in better decision-making and can lead to more efficient drilling and completion techniques, which lower the capital intensity of their operations.
- Cost of Supply Framework: They apply a rigorous cost of supply framework to ensure that any investments made align with their financial criteria and strategic objectives, which include sustaining production at a lower cost.
These strategies are part of ConocoPhillips’ broader effort to adapt to the dynamic energy market while focusing on sustainability and shareholder returns
