Author Topic: The Oil And Gas Situation: Trump's American Energy Dominance Agenda Becoming Reality  (Read 837 times)

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Offline thackney

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The Oil And Gas Situation: Trump's American Energy Dominance Agenda Becoming Reality
https://www.forbes.com/sites/davidblackmon/2018/01/29/the-oil-and-gas-situation-trumps-american-energy-dominance-agenda-becoming-realty/
JAN 29, 2018

...It's important to remember that more than 70% of U.S. shale oil and natural gas wells are drilled by a relative handful of large, independent producers. In a really good piece published at Platt's late last week, CEOs at several of those companies talked about their plans for 2018. The headline of the piece - "North American E&Ps to Focus on Capital Discipline" - basically tells the story.

These companies do plan to increase their overall production during 2018, but unlike 2017, when they achieved that goal mainly by activating hundreds of additional drilling rigs, they plan to meet their goals this year through the utilization of improved completion and fracking technologies. Note that the other, equally important, main goal for these companies this year is to increase returns to shareholders and investors.

"Many operators, led by Anadarko Petroleum (APC), have already begun to take action to return cash to shareholders, sell non-core assets to shore up balance sheets, or announce growth programs that are limited to internally generated cash flows," notes Gordon Douthat, a Senior Advisor at Wells Fargo.  Indeed, we see exactly this sort of capital allocation taking place across the large E&P sector.

Given this information, no one should be surprised at all at the relatively static rig count through January - that's actually the plan, as these companies have goals of growing overall production through maximizing recoveries from each well drilled rather than through drilling more and more wells....
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