HOBBS, N.M.— With oil prices hovering in the mid-40s, producers in June were looking for ways to minimize costs while still ramping up production in the Permian Basin.
Regional executives from Concho Resources, Chevron and OXY spoke during a panel discussion at the Economic Development Corporations of Lea County’s EnergyPlex Conference June 27 in Hobbs.
“We expect price volatility,” said Clay Bateman, vice president of Concho Resources New Mexico.
Bateman said sustained $40-a-barrel prices would cause the company to “turn the boat” and reevaluate its future financial plans.
In the meantime, each company emphasized plans to cut down on production costs.
All are working to develop and refine more of a “manufactured” model to streamline operations and reduce costs, where several wells are drilled simultaneously on one pad.
Jeff Bennett, president and general manager of OXY's Permian resources in the Delaware Basin, said the company began constructing a logistical hub in the Great Sand Dunes, an area Bennett said has been a main focus of his.
The hub includes a three-unit train loop and sand storage.
"This will essentially give us a large logistical hub to support our Greater Sand Dunes development over the next several years,” Bennett said.
The hub is expected to be completed next year.
The companies are also hoping to see a rebound for service companies in the basin, which were hard-hit during the most recent downturn in the industry and are critical for oil and gas producers.
Bateman said Concho’s service providers in the area have implemented substantial rate increases during the first half of 2017.
“Hopefully they’re beginning to gain some traction,” he said.
Collectively, the companies employ hundreds of New Mexicans.
As production ticks upward, they’re predicting a need for more.
Bennett praised Hobbs for its efforts to improve the community.
“We really encourage the EDC (Economic Development Corporation of Lea County) to provide a business-friendly place as well as a community that our employees want to be a part of,” said Bennett.
Brent Gros, general manager of asset development of Chevron's Mid-Continent Business Unit, agreed that more attractive communities for employees benefit the company.
"We’ve been effective at retaining employees when they want to be in the area," Gros said.
All three panelists said the toughest positions to fill in New Mexico operations are for oilfield instrumentation and electronic specialists.