US Oil Output Soars As Exxon Cuts Deal To Buy Pioneer Resources

Domestic oil production reached an all-time high last week, marking a full recovery from the COVID-19 pandemic after drilling had dropped by more than 25% between the pre-COVID peaks and a low point in early 2021, as reported by Tim Mullaney on CNBC.

ExxonMobil is consolidating its position with a $60 billion acquisition of Pioneer Natural Resources. I Photo: Federal Health

This resurgence is being driven by the Permian Basin in Texas, where ExxonMobil is consolidating its position with a $60 billion acquisition of Pioneer Natural Resources. The Permian Basin boasts low production costs per barrel and convenient pipeline access, which results in quicker returns compared to offshore drilling.

Despite Wall Street's encouragement for oil and gas companies to reduce capital spending and increase buybacks and dividends, production has increased by about 3 million barrels per day from the low point and could rise by nearly 1 million more barrels by 2025.

After three and a half years, a threefold increase in the S&P 500 Energy Index, and various soon-to-be-forgotten cultural disputes, the US Department of Energy announced on October 12 that US crude oil production had reached a record high of 13.2 million barrels per day, completely erasing the COVID-era losses of more than 3 million barrels per day.

This news followed a $60 billion deal between Exxon Mobil and the independent oil producer Pioneer Natural Resources.

The combination of recovering production, continued pressure from Wall Street for cost control and high stock dividends, and consolidation like the Exxon-Pioneer agreement is not a coincidence.

WEEKLY FEATURE : Jose Mari Chan And The Christmas Anthem