Exxon Mobil Corporation (XOM) is reportedly planning to sell conventional oil assets in the Permian Basin, a move that could fetch them up to $1 billion. This decision comes as the company re-evaluates its portfolio and shifts its focus towards expanding its shale production operations. This strategic shift follows the company’s $60 billion acquisition of Pioneer Natural Resources Co. in May.
According to Bloomberg, the assets slated for sale include older wells in the Permian’s Central Basin, which produce consistent but modest oil volumes. Exxon Mobil confirmed their exploration of market interest for these assets in West Texas and Southeast New Mexico, stating that this decision aligns with their ongoing portfolio evaluation strategy.
Despite the sale, Exxon Mobil remains bullish on the future of oil demand. This week, the company predicted that global crude demand will remain above 100 million barrels per day through 2050, with a gradual leveling off post-2030. They highlighted that without new investments, oil supply could decline to under 30 million barrels per day by 2030, potentially leading to a significant shortfall. Exxon plans to produce 4.3 million barrels of oil and gas per day this year, highlighting their commitment to remaining a major player in the energy sector.
In July, Exxon Mobil completed the sale of its Malaysian oil and gas assets to the state energy firm Petronas, marking their exit from the country’s upstream sector. This move reflects their focus on strategic asset allocation and prioritizing areas of greatest growth potential.
Investors interested in gaining exposure to Exxon Mobil can invest in the Energy Select Sector SPDR Fund (XLE) or the IShares U.S. Energy ETF (IYE).
As of Wednesday’s pre-market trading, XOM shares were down 0.23% at $117.41.
