Occidental Petroleum Corp expects to have drilled 195 shale oil wells in its home state of California by the end of this year, although it would like to drill far more if the permitting process allowed it.
The fourth-largest U.S. oil company said the wells drilled in California shale outside its Elk Hills property would total 154, with extraction involving mainly acid instead of hydraulic fracturing and at a cost of $3.5 million each to complete.
That compares with Oxy's per-well cost of more than $8 million in the Bakken oil shale around North Dakota, where the company said at least the cost trend was down.
Apart from Elk Hills, the former Naval Petroleum Reserve which was the U.S. government's largest-ever property sale back in 1998 for $3.65 billion, Occidental said its California shale production was made up of about 80 percent liquids.
Asked about a previously goal of drilling 300 wells per year in the state, Chazen said he believed he could achieve that if he could get the permits fast enough.
Predicting what somebody in the state of California might do makes predicting oil prices easy, he said of the permitting process. It makes the program significantly more inefficient than you might like it to be and makes it hard to plan.
Nonetheless, California production is expected to drive overall output growth for the Los Angeles-based company, which reported better-than-expected profits on Thursday that gave an 11 percent boost to its share price.