Oil production from the Permian Basin is poised to rise to fresh records this year as drilling gets more efficient, even as the number of rigs remains stable, Plains All American Pipeline (NASDAQ:PAA) said Friday.
Permian production should grow to 6.4M bbl/day at the end of this year, up from 6.1M at the end of 2023, primarily from the Delaware Basin, the company said in its Q4 earnings presentation.
300 rigs are “probably doing the work of close to 330 rigs 12 months ago,” Plains (PAA) CFO Al Swanson said on a post-earnings conference call, as reported by Bloomberg, adding that he sees the industry increasing the amount of oil pumped from each well compared with the total volume available in the field.
Swanson also said Plains (PAA) is looking to make some deals as M&A activity heats up across the oil and gas industry.
“We’re hopeful that we’ll be successful on some bolt-on acquisitions,” the CFO said, noting small acquisitions of Permian Basin crude gathering lines have helped improve the company’s earnings.
Plains All American (PAA) closed +0.3% on Friday after posting better than expected Q4 adjusted earnings while revenues fell 2% Y/Y to $12.7B; it sees FY 2024 adjusted EBITDA attributable to unitholders of $2.625B-$2.725B, compared with $2.71B for FY 2023 in line with $2.68B analyst consensus estimate.