U.S. shale energy companies are cutting their spending levels in 2019, but they’re still planning on increased oil and gas output as the nation continues to hit new production records.
Shale energy companies plan to cut their capital spending by 5 percent on average after crude prices plunged late last year, even though Big Oil majors like Exxon Mobil and Chevron continue to spend more. However, oil and gas production levels are expected to still surge 15 percent from last year, or 5 percent from the end of last year, according to a new report from the Norwegian research firm Rystad Energy.
“Earnings and guidance confirm that most U.S. shale operators aim to moderate drilling and completion activity this year, prioritizing cost discipline over aggressive growth,” said Rystad Energy partner Artem Abramov.
While shale companies are burdened by debt loads and dividend payout to investors, they’re still managing to churn out more oil and gas even as they cut their budgets.
U.S. oil production surged from about 10 million barrels a day at the beginning of 2018 to a projected new record now of just more than 12 million barrels daily. Rystad estimates that 2019 growth projections should carry the output above 13 million barrels a day by the end of this year. That’s a lot of growth, but at a reduced pace from last year.
The combination of the groundwork previously completed by energy companies coupled with improved technological efficiencies helps them grow production even as they reduce spending. Outputs will be further boosted by the amount of drilled but uncompleted wells in West Texas’ booming Permian Basin that are just waiting for new pipelines to come online later this year.
— Read on www.chron.com/business/energy/amp/U-S-energy-companies-produce-more-oil-even-as-13655091.php