Forbes Piece: Can ExxonMobil Lead A Second Shale Revolution?

[Note: This story is also published at Forbes.com]

Darren Woods, CEO of ExxonMobil, and US Senator Joe Manchin, Democrat from West Virginia, speak during the Milken Institute Global Conference in Beverly Hills, California, on May 1, 2023. (Photo by Patrick T. Fallon / AFP) (Photo by PATRICK T. FALLON/AFP via Getty Images) AFP VIA GETTY IMAGES

One recent story that probably should have received more attention comes from remarks made by ExxonMobilXOM CEO Darren Woods, who spoke June 1 at the Bernstein Strategic Decisions Conference. In those remarks, Woods laid out his recent challenge to his internal staff to find ways to double the company’s per-well recoveries in its U.S. shale operations over the next five years.

An Ambitious Goal

It’s an ambitious goal, one that could, if successful, essentially result in a second shale revolution in the United States. Woods’s internal challenge came in the wake of the plan announced last December to increase the company’s overall production in the prolific Permian Basin to 1 million barrels of oil equivalent per day (Mmboepd) by the end of 2024. That plan envisioned production growth of 9-11 percent in 2023, with most of that being accomplished through the drill bit.

Woods said his plan for per-well recoveries via technology advances would initially derive from deployment of longer horizontal laterals in each wellbore, along with the deployment of tech that is better able to hold the fractures created by the hydraulic fracturing job for longer periods of time, thus allowing more of the oil trapped in the underground shale to flow to the surface.

Hydraulic fracturing, or “fracking,” is the long-used technology involving forcing a mixture of water, chemicals and sand or other proppant into the shale rock thousands of feet below ground using an array of surface pumps. The mixture of frac fluid breaks up the rock into thousands of fractures, leaving the sand or other proppant inside the fractures to hold them open and allow the oil and natural gas to flow to the surface.