A few high-profile shale executives say the glory days of shale drilling are over.
In a round of earnings calls, the financial results were mixed. A few companies beat earnings estimates, while others fell dramatically short.
But aside from the individual performances, there were some more newsworthy comments from executives on the state of the industry. A common theme emerged from several notable shale executives: the growth frenzy is coming to an end.
The chief executive of Pioneer Natural Resources, Scott Sheffield, said that the Permian basin is “going to slow down significantly over the next several years,†and he noted on the company’s latest earnings call that the company is also acting with more restraint because of pressure from shareholders not to pursue unprofitable growth. “I’ve lowered my targets and my annual targets, a lot of it has to do with…to start with the free cash flow model that public independents are adopting,†Sheffield said.
https://finance.yahoo.com/news/drilling-frenzy-over-u-shale-000000002.html
Two heavyweights are quoted which guided the shale frenzy to where it is now.
Better pay attention to them.
My own observation is included in their comments indirectly:
Geology is the factor that decides when enough is enough. When one goes from Tier 1(attractive) areas to Tier 2 and 3(so so) areas, one has run out of the 'good stuff' and one goes from pattern drilling to selective drilling.
And geology is a tough thing to beat.
I had thought that it would be a couple of more years down the road before we reached this point. Hope it still is.
