Oil Field in Texas to Receive Upgrades from Exxon

As soon as Exxon shares its plans to buy XTO Energy, the big oil company announces plans to increase production in East Texas' Hawkins Field to extend its life to 25 years and draw 40 million barrels of oil from the reservoir at a cost of $340 million.

Hawkins wells current receive injections of air-culled nitrogen that causes the nitrogen to blend with the natural gas. This makes it challenging to sell the oil. Instead of spending more money on new locations, Exxon will build new technology in early 2010 that will separate natural gas and nitrogen, and then turn around and sell the natural gas while reusing nitrogen in its well.

"ExxonMobil is applying some of its most advanced technologies to mature oil and natural gas fields. The investment is part of an ongoing effort to find, develop and produce more domestic supplies of oil and gas to meet the country's growing energy needs," says Kok-Yew See, ExxonMobil U.S. production manager. "These advanced technologies breathe life into mature fields, thereby producing more resources for energy consumers."

"ExxonMobil continues to invest in oil and natural gas development in Texas. Over the past three years our capital expenditure in the state exceeded $700 million. These investments help create jobs and contribute to the economic growth of the region and state. They also help maintain Texas’ position as the leading U.S. oil and natural gas producing state," says See.

Not only will the company have more natural gas to sell, but also the new technology should reduce air emissions by almost one-third. Exxon says the new technology should be operational in late 2011 and lead to permanently employing about 100 people with the possibility of 300 by the time it reaches peak production.

Should the new technology succeed, it could lead to more opportunities for Exxon as it can use the process in other fields. The company believes working with old oil fields makes good business sense as opposed to dealing with other countries' regulations and competition. Other companies are also working with different technologies to add life to older oil wells.

One of the largest oil producers in Texas, Hawkins Field is 100 miles east of Dallas in Wood County covering 10,000-acres. Hawkins manages over 200 wells that have produced 800 million barrels of oil.