In the release of its third-quarter results, Diamondback said it planned to pump some 221,000 to 225,000 barrels of crude daily. For full 2021, Diamondback said production would come in at between 222,000 to 223,000 bpd.
“As we move into 2022, we are still seeing excess oil supply and varying demand recovery profiles across the globe. As such, we remain committed to capital discipline and our plan to return excess Free Cash Flow to our stockholders,” said the company’s chief executive, Travis Stice, echoing a widely shared attitude in the shale oil and gas industry.
“Therefore, we are committing to maintaining our fourth quarter 2021 Permian oil volumes throughout next year and we believe this can be accomplished by spending the amount of capital implied by our fourth quarter 2021 guidance run-rate,” Stice also said, noting this approach would allow the company to return more cash to shareholders, pay down more debt, and maximize free cash flow.
Most large shale drillers are adopting the same approach in order to keep their shareholders happy after years of burning cash to boost production to a maximum. While this new approach of restraint is welcomed by shareholders, the general public—and drivers specifically—have no reason for joy.
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