Shale driller Ovintiv increases 2024 oil and gas production target on unexpected Permian success

(Bloomberg) – Shale driller Ovintiv Inc. increased its 2024 production target, the second oil and gas company to do so this year.

The company expects to pump the equivalent of 570,000 to 580,000 bbl of crude this year, compared with the previous forecast of 545,000 to 575,000, according to a statement. At the mid ranges of those targets, the increase would amount to 2.7%. The target for the oil and condensate portion of that production was raised by about 1% to roughly 208,000 bpd.

Ovintiv followed Matador Resources Co. in raising full-year production plans at a time when U.S. drillers have been committing to flat or moderate output growth so they can return more cash to investors and expand portfolios of future drilling sites.

Wells in the Permian basin of Texas and New Mexico are performing better than expected, potentially complicating plans by the Organization of Petroleum Exporting Countries and allies to begin unwinding coordinated production controls intended to bolster crude prices.

Ovintiv’s production is about one-third oil and condensate, with the rest comprised of natural gas and natural gas liquids.