Chevron reported strong performance in the Permian Basin, with first-quarter production at 859,000 barrels per day, slightly down by 1% from the previous quarter but stronger than anticipated.
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Chevron Wells Drilled in the US Since 2023
The improved performance was due to shorter frack-to-production cycle times, strong well performance, and increased activity on royalty acreage. Chevron expects first-half production to decline less than 2% from the fourth quarter of last year, better than previous guidance. The company plans to add another frack spread in the second half of the year, aiming to exit 2024 with production around 900,000 barrels per day. They also emphasized their coverage on takeaway capacity for oil, NGL, and gas, ensuring they are not exposed to in-basin discounted pricing.
Plans for the Delaware
Chevron mentioned specific plans and developments regarding their operations in the Delaware Basin:
- Increased Activity in New Mexico: Chevron is undertaking more development in the New Mexico portion of the Delaware Basin this year.
- Infrastructure Build-Out: This increased activity will require a build-out of infrastructure, including midstream takeaway, gas processing, and water handling capabilities, which are part of their capital program.
- Maintaining Reliability: Chevron emphasized the importance of maintaining base business reliability in all operational aspects, including seismic activity, to ensure safe and efficient operations.
These points highlight Chevron’s commitment to expanding and optimizing their operations in the Delaware Basin, focusing on infrastructure development and reliability to support increased activity and production.
Conclusion
In conclusion, Chevron delivered a strong first quarter of 2024 with robust financial performance, significant returns to shareholders, and strategic advancements in both traditional and renewable energy sectors. The company continues to focus on capital efficiency, high-grading its portfolio, and maintaining disciplined investment strategies. Progress in key projects like the Tengiz oilfield, Permian Basin, and Delaware Basin underscores Chevron’s commitment to operational excellence and growth. Additionally, Chevron’s ongoing investments in new energy technologies and their integration into existing operations position the company for future sustainability and profitability. The merger with Hess is on track, promising further strategic growth and enhanced shareholder value.
