The shale drillers behind booming U.S. oil and natural gas output have survived a bevy of challenges in recent years, from a historic oil price downturn to an with a flood of cheap crude.
Now, with U.S. output at all-time highs near 12 million barrels per day, the industry is facing a new obstacle: how to keep growing output amid a wave of belt-tightening that is cutting billions of dollars from capital budgets.
Publicly traded shale drillers emerged from the 2014-2016 downturn with to get their finances in order and start generating value for shareholders. For years, drillers have spent more cash than they generated, borrowing heavily to snap up acreage and increase their output at seemingly any cost.
The latest round of quarterly earnings reports shows many shale drillers are cutting spending to meet investors‘ demands. That is translating into lower expectations for oil and gas output from the companies, which rely on advanced drilling methods like hydraulic fracturing to free oil and gas from shale rock formations.
But even with these frackers now pursuing the elusive goal of drilling at a profit, forecasters expect another blockbuster year for U.S. output. After surging by 1.6 million barrels per day last year, making the U.S. the world‘s biggest producer, average annual American output is poised to grow by more than 1.4 million bpd in 2019, according to the Department of Energy.
Photo as published in Seneca Standard
