By Sabrina Valle
HOUSTON (Reuters) โ Exxon Mobil will take 18 to 24 months to achieve its desired production synergies from its $60 billion purchase of U.S. shale oil producer Pioneer Natural Resources, the companyโs top shale executive said on Friday.
Exxon this week closed all-stock acquisition after agreeing to an antitrust consent order that barred the former Pioneer CEO from joining its board and is moving in coming weeks to combine operations that will form the largest oil producer in the Permian basin.
The purchase more than doubles Exxonโs output in the Permian, the top U.S. shale field, to about 1.3 million barrels per day of oil and gas. An additional 700,000 barrels is predicted by 2027.
โWeโre going to take a best-of-both approach to putting the organization together and that includes how we approach development,โ said Bart Cahir, Exxonโs senior vice president of shale.
He declined to say whether the combined firmโs Permian drilling rigs and hydraulic fracking fleets will increase or decrease this year.
With Pioneerโs acreage, Exxon controls 1.4 million acres (566,560 hectares) of prime areas that will allow it to drill longer and more closely-spaced wells in cube format, he said.
Deploying the new techniques will take 18 to 24 months to achieve the desired goals, he said. Exxon aims to provide โbetter recoveries and better productivity. And over time that enables you to grow production. And thatโs the key element here,โ Cahir said.
Exxon has proprietary technologies that allow it to be โvery, very prescriptive and targeted in our designs. Thatโs something that enables us to do more with less,โ he said.
The company expects to offer positions to the โoverwhelming majorityโ of Pioneer employees in the next two months, he said, declining to specify any cuts to Pioneerโs roughly 2,200 workers.
Integration teams from both companies have been working for six months to smooth the transition process. They โhave really clicked well. Weโre a lot more similar than we are different,โ Cahir said.
Cahir said Pioneerโs crude oil trading team fits well into Exxonโs global trading organization, created more than a year ago.
Exxon also will move Pioneerโs oil into Exxonโs pipeline and logistics, connecting the volumes to U.S. Gulf Coast plants that produce fuels and plastics, he said.
(Reporting by Sabrina Valle; editing by Gary McWilliams and Marguerita Choy)
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