Exxon Plans Increase in Capital Spending in 2017

Exxon Mobil said Wednesday it plans to raise capital spending by 16% in 2017 to $22 billion, with capital and exploration expenses through to the end of the decade to average $25 billion a year. More than one quarter of the planned spending this year will be made in high-value, short-cycle opportunities, including in the Permian and Bakken basins, the company said. Short-cycle investments are those expected to generate positive cash flow in less than three years after initial investment.

The company has an inventory of more than 5,500 wells in the Permian and the Bakken with a rate of return greater than 10% at $40 a barrel. Total annual net production growth from these basins through 2025 could be as high as 750,000 oil-equivalent barrels per day at a compound annual growth rate of about 20%.

Exxon also said it will advance longer-term projects in locations including Canada, Guyana and the United Arab Emirates. These projects are focused on growing higher value production.

By Jon Flanagan