Major oil companies move toward profitability in third quarter

Fuel Fix:

Exxon Mobil and Chevron on Friday reported surging third-quarter profits and plans for accelerated growth in prolific West Texas oil fields as crude prices stabilize and drillers recover from a downturn that wiped out thousands of jobs.

In the Permian Basin, the center of the U.S. oil industry's lopsided recovery, Exxon plans to increase its fleet of drilling rigs from 20 to 30 by the end of next year and begin drilling horizontal wells that run sideways for three miles, in an effort to boost the amount of oil and gas it pumps by 20 percent by 2025.

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Meanwhile, Chevron's multibillion-dollar push into the Permian has lifted oil production there by 30 percent over the past year, recently put its 15th rig to work in the field and expects its returns to double its investments over the life of its wells there.

"It's a very good use of your money," Chevron Chairman and CEO John Watson told investors.
That the two largest U.S. oil companies plan to continue pushing into West Texas is only the latest sign that the energy industry has turned a corner, supported for now by a renewed effort by overseas OPEC producers to ease the oil glut.

U.S. crude prices appear to have stabilized above $50 a barrel in recent weeks, on the hopes Saudi Arabia and other producers will extend output cuts well into next year. Oil companies have added back roughly 30,000 of the 100,000 jobs they cut in recent years across Texas, as higher prices bolster their bottom lines.
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The energy business appears to be swinging back from the downturn and recorded these profits despite the hurricanes impact on offshore wells and the refinery business.  It is also good news for the Permian basin assuming they can find enough workers to keep pace with their drilling objectives.  Oil has been flirting with $60 a barrel in recent days which would make most wells profitable.