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Oil production from the Permian Basin is set to hit new records this year as drilling becomes more efficient, even as the number of rigs remains stable, Plains All American Pipeline (NASDAQ:PAA) said Friday.
Permian production is expected to grow to 6.4 million bbl/d at the end of this year, compared to 6.1 million at the end of 2023, mostly from the Delaware Basin, the company said in its fourth-quarter earnings presentation.
300 rigs are “probably doing the work of almost 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 sector rising the amount of oil pumped from each well relative to the total volume available in the field.
Swanson also said Plains (PAA) is looking to get some deals done as M&A activity heats up in the oil and gas sector.
“We are confident we will be able to make some add-on acquisitions,” the CFO said, noting that small acquisitions of Permian Basin crude gathering lines have helped improve the company’s earnings.
Plains All American (PAA) closed +0.3% Friday, after posting better-than-expected fourth-quarter adjusted earnings, while revenue fell 2% y/y to $12.7 billion; expects fiscal 2024 adjusted EBITDA attributable to equity holders of $2.625 billion-$2.725 billion, compared to $2.71 billion for fiscal 2023 in line with analysts’ consensus estimate of $2 .68 billion.