Adds comments from earnings call.
Growth from the top-performing Permian shale basin is likely stalling, given the number of producers that are eyeing flat-to-lower spending, Chevron chief executive officer Mike Wirth said today.
The Permian is "not growing at the rate that we've seen before, probably plateauing", Wirth said Friday on an earnings call after the company reported third-quarter results.
Still, the Permian is a "dynamic" basin that is responsive to market signals and so the outlook could easily change, he said.
Chevron's Permian output in the third quarter came in just above the company's target of 1mn b/d of oil equivalent (boe/d), reflecting ongoing efficiencies that have enabled it to reduce rigs and completion crews.
"We've got no change to our plans to moderate growth and focus on cash generation," Wirth said, given his strategy to run Chevron's Permian operations for cash flow.
In the meantime, the company is focused on improving technology to boost recovery rates from the region.
Chevron posted record output of 4.1mn boe/d in the third quarter, buoyed by the acquisition of Hess, which handed the US major a 30pc stake in a prized Guyana asset.
While Hess contributed 495,000 boe/d to production in the latest quarter, a further 227,000 boe/d boost came from gains in the Permian basin and ramp-up of projects in the Gulf of Mexico and Kazakhstan.
"The integration of Hess is progressing well, unlocking synergies across our operations and positioning Chevron as a premier global energy company," Wirth said.
Profit fell to $3.5bn in the third quarter, down from $4.5bn in the year-earlier period, as lower oil prices and severance and transaction costs related to the Hess deal outweighed higher refining margins.
Overall shareholder distributions came in at $6bn in the quarter, including buybacks of $2.6bn and dividends of $3.4bn.
The company expects full-year production growth to be at the top of its 6-8pc guidance range, excluding legacy Hess, chief financial officer Eimear Bonner said.
