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Mon Nov 11, 2019, 12:46 PM

Frackers Prepare to Pull Back, Exacerbating a Slowdown in U.S. Oil Growth

After pushing U.S. oil and natural-gas production to record levels, some shale companies are doing the unthinkable: They are planning to pump less.

The pullback is sharpest among the country’s largest natural-gas drillers. Several producers, including EQT Corp. and Chesapeake Energy Corp., have said during third-quarter earnings that they may shrink output next year.

But even more oil-focused shale companies are promising to rein in spending and forecasting slower growth. Diamondback Energy Inc., Callon Petroleum Co. and Cimarex Energy Co., all active in the Permian Basin in Texas and New Mexico, told investors last week that they were contemplating holding next year’s spending around current levels.

Voluntarily restricting growth is a new dynamic for the industry and reflects a calculus that it is better to spend and produce less while hoping for higher commodity prices. A pullback by oil producers would likely cause U.S. oil production growth, already slowing this year, to flatten further in 2020. Natural-gas companies, meanwhile, are attempting to whittle down a glut that has driven prices to multiyear lows.


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Reply Frackers Prepare to Pull Back, Exacerbating a Slowdown in U.S. Oil Growth (Original post)
Yo_Mama_Been_Loggin Nov 11 OP
Miguelito Loveless Nov 11 #1
mr_lebowski Nov 11 #2

Response to Yo_Mama_Been_Loggin (Original post)

Mon Nov 11, 2019, 01:00 PM

1. The entire "fracking boom"

was financed with borrowed money that is never going to be paid back.

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Response to Miguelito Loveless (Reply #1)

Mon Nov 11, 2019, 01:35 PM

2. It's also going to be short-lived ...

These tight shale plays are not regular oil fields like Ghawar and North Sea that produce for decades. You gotta move the rigs all over the place to keep producing.

If they're 'slowing things down' I would almost guarantee that the real reason is because the cost of production is going up, due to rapid depletion rates. They need prices to go up to make it profitable again ... ergo, withhold production to spark that.

Which is actually good in a way ... less carbon pulled from the ground and burned.

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