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OIL: US Shale Not in Position to Aggressively Ramp Up Output: Quantum

OIL
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US shale producers are no longer in a position to aggressively ramp up output to reduce energy prices, according to Wil VanLoh, CEO at Quantum Energy Partners in an interview with Bloomberg.

  • “The US shale revolution has run its course,” he said.
  • “Clearly the investors have put oil and gas companies on a very short leash. They’ve required a massive amount of the cash flow every year to get returned to shareholders.”
  • Growth in US oil production is expected to moderate amid investor discipline and focus on shareholder returns. EIA forecasts the US crude production growth rate of 7.9% from 2022-23 falling to 2.5% in 2023-24 and 3.5% in 2024/25 as larger companies consolidate and look to do more with less.
  • All shale basins have a different breakeven point but Quantum estimates that below $60/bbl there isn’t a “long runway of inventory left.”
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US shale producers are no longer in a position to aggressively ramp up output to reduce energy prices, according to Wil VanLoh, CEO at Quantum Energy Partners in an interview with Bloomberg.

  • “The US shale revolution has run its course,” he said.
  • “Clearly the investors have put oil and gas companies on a very short leash. They’ve required a massive amount of the cash flow every year to get returned to shareholders.”
  • Growth in US oil production is expected to moderate amid investor discipline and focus on shareholder returns. EIA forecasts the US crude production growth rate of 7.9% from 2022-23 falling to 2.5% in 2023-24 and 3.5% in 2024/25 as larger companies consolidate and look to do more with less.
  • All shale basins have a different breakeven point but Quantum estimates that below $60/bbl there isn’t a “long runway of inventory left.”