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U.S. shale producers say they will keep drilling under wraps even if oil prices top $100/bbl, citing the need for financial discipline during what they see as President Biden’s “war” on fossil fuel production, Financial Times reported Monday.
At an energy conference last week in Oklahoma City, many companies cited the Biden administration’s decisions to limit drilling on federal lands and waters as the main reason they are restricting their investments, as well as ongoing permitting delays and often hostile rhetoric from the administration.
“I just don’t see producers getting all excited about near-term prices, and I think we are going to see more continued volatility,” Devon Energy (DVN) CEO Rick Muncrief said, according to Financial Times. “By nature, most of us will just say ‘Let’s stay disciplined. Let’s keep our production flat.'”
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“It’s political power,” asserted Continental Resources founder Harold Hamm, who organized last week’s conference. “They believe that is what their base wants. But, I’m sorry, a lot of those people want to buy gasoline at decent prices and heat their homes.”
U.S. shale companies reinvested ~65% of their capital in production this year, according to Rystad Energy, which forecasts the companies will continue to reinvest at rates of ~50% for the next several years.
The number of active U.S. oil rigs has dropped by 16% from the same time a year ago to 502, according to data from Baker Hughes, and far below the peak of 1,609 operating oil rigs during the U.S. shale revolution in 2014.
