Tickers in this Article: IMO, XOM, HK, SWN
Exxon Mobil (NYSE:XOM) has built up an extensive base of properties in many unconventional resource plays in North America, and will spend billions in capital to develop these areas to help meet its future production goals. According to the company, this will mean a 500% increase in oil sands production by 2020. Let's take a look at where the company stands today, and what its future prospects might be for investors.

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Volume Growth
Exxon Mobil recently announced an increase in its capital expenditures through 2015; the company plans to spend $34 billion in 2011 and between $33 billion and $37 billion each year through 2015. This spending will lead to average annual oil and gas volume growth of between 4% and 5% through 2014.

Unconventional Resource Plays
Exxon Mobil is developing various unconventional resource plays in North America to meet these production goals, including oil sands, heavy oil, tight gas, and shale oil and gas areas. Many of these prospective areas were picked up by the company when it purchased XTO Energy.

Shale Plays
Exxon Mobil has 240,000 net acres under lease in the Haynesville Shale and reported gross production of approximately 250 million cubic feet per day in 2010. In the Fayetteville Shale, Exxon Mobil has 550,000 net acres under lease and also reported gross production of approximately 250 million cubic feet per day last year.

Exxon Mobil recently added to its holdings in the Fayetteville Shale through the purchase of producing properties here from Petrohawk Energy (NYSE:HK). Exxon Mobil paid $575 million for properties that produced just under 100 million cubic feet per day.

Southwestern Energy (NYSE:SWN) is the largest operator in the Fayetteville Shale and has been involved with more than 2,400 wells since entering the area in 2004. The company reported production of 350.2 Bcf from here in 2010.

Exxon Mobil also has large acreage positions in several other popular unconventional plays including the Bakken, where it has 410,000 net acres, and the Eagle Ford Shale, where the company has leased 120,000 net acres.

Oil Sands/Heavy Oil
Exxon Mobil has more than 130 projects in its upstream portfolio, with 28% of them in various heavy oil and oil sands plays in North America. One of these oil sands projects is the Kearl project in Canada, which is under construction by Imperial Oil (NYSE:IMO) and majority owned by Exxon Mobil. The project is scheduled to start up in late 2012 with production of 110,000 BOE per day.

Production Growth
Exxon Mobil estimates that it can double production from the various shale and tight gas plays over the next decade, reaching one million barrels of oil equivalent (BOE) per day by 2020. Exxon Mobil estimates that its heavy oil and oil sands production will also grow quickly through 2020, and reach more than 600,000 BOE per day by that time. Oil sands production will increase by 500% over that time.

The Bottom Line
Exxon Mobil has devoted a considerable portion of its capital expenditures toward unconventional plays in North America as it looks to achieve its production goals in 2011 and beyond. (For more, see Exxon Mobil To Increase Capital Spending.)


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