{"id":45023,"date":"2019-04-04T09:51:05","date_gmt":"2019-04-04T14:51:05","guid":{"rendered":"https:\/\/olduvai.ca\/?p=45023"},"modified":"2019-04-04T09:51:10","modified_gmt":"2019-04-04T14:51:10","slug":"shale-is-in-a-deep-state-of-flux","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=45023","title":{"rendered":"Shale Is In A Deep State Of Flux"},"content":{"rendered":"\n

Shale Is In A Deep State Of Flux<\/a><\/h3>\n\n\n\n
\"Chevron<\/figure>\n\n\n\n

Oil prices are rising to their highest level in months, with WTI having topped $60 per barrel, but the U.S. shale industry is still showing signs of strain.<\/p>\n\n\n\n

\u201cThis is a cycle in our industry where only the large well-capitalized companies can grow. Small companies without access to capital are stagnant,\u201d one oil executive in Texas said in response to a survey from the Dallas Federal Reserve<\/a>. \u201cIt is a major industry readjustment period.\u201d<\/p>\n\n\n\n

The oil majors are scaling up their operations<\/a> in the Permian basin, with ambitious plans to ratchet up output. ExxonMobil plans on hitting 1 million barrels per day (mb\/d) by 2024 from the Permian, and Chevron hopes to reach 900,000 bpd. U.S. shale is more important than ever to their business plans.<\/p>\n\n\n\n

But even as the role of shale is critical to the majors, small- and medium-sized E&Ps are struggling. Poor financial returns, loss of interest from investors, pressure to cut spending and return cash to shareholders, and encroachment from the majors<\/a> are tightening the screws on smaller drillers. The \u201cshrinkage in market capitalization of some companies is breathtaking. These loses translate into a loss of interest in further direct investments in the drilling of new oil and\/or natural gas prospects,\u201d another respondent said in the Dallas Fed survey.<\/p>\n\n\n\n

A few other concerns seemed to dominate the thinking of Texas oil executives:<\/p>\n\n\n\n