Shale driller Ovintiv Inc. has revised its 2024 production target upwards, becoming the second oil and gas company this year to do so.
The company now anticipates producing between 570,000 and 580,000 barrels of oil equivalent per day (boe/d), compared to its previous forecast of 545,000 to 575,000 boe/d.
This adjustment represents an approximate 2.7% increase at the midpoint of these ranges. Additionally, the production target for oil and condensate has been raised by about 1%, reaching roughly 208,000 barrels per day (bpd).
Comparative Context with Industry Trends
Ovintiv’s decision follows a similar move by Matador Resources Co., which also increased its full-year production plans.
This trend comes at a time when many U.S. drillers are opting for stable or only modest growth in output, with a focus on returning more cash to investors and expanding their drilling site portfolios.
The surprising productivity gains in the Permian Basin, which spans Texas and New Mexico, are a significant factor in these revised targets.
These gains could potentially disrupt plans by the Organization of Petroleum Exporting Countries (OPEC) and its allies, who are gradually unwinding coordinated production cuts aimed at supporting crude prices.
Breakdown of Production Composition
Ovintiv’s production is composed of approximately one-third oil and condensate, with the remaining output consisting of natural gas and natural gas liquids.
The unexpected success in the Permian Basin has led to the increased output forecast, highlighting the basin’s continued significance as a prolific source of hydrocarbons.
The company’s upward revision in production targets underscores the dynamic nature of the oil and gas industry, where operational successes and market strategies can swiftly alter production forecasts and industry expectations.