Peak Shale: How U.S. Oil Output Went From Explosive to Sluggish
https://www.bloomberg.com/news/articles/2019-10-14/peak-shale-how-u-s-oil-output-went-from-explosive-to-sluggishAmerica’s shale boom got the world accustomed to soaring production. Now growth has slowed, and a cloud has formed over the industry.
Fracking pushed the U.S. closer to its long-sought goal of energy independence at a time of unprecedented geopolitical risk. Wells from Texas’s Permian Basin to the Bakken in North Dakota turned farmers and ranchers into overnight millionaires. Drivers enjoyed cheap gasoline, decent-paying jobs sprung up in small towns and new technology attracted investment from all corners of the world, keeping drillers busy.
It’s true that the end of the boom has been foretold before. For years, the good times came with the warning that a litany of financial and engineering issues would doom the revolution. Such naysaying was proven wrong again and again by the industry’s resilience. Producers were able to borrow cheaply, fine-tune operations and trim costs along their supply chains.
But the tea leaves look different this year. Money isn’t as plentiful for an industry that in the past decade burned through nearly $200 billion. Investors are restless. Returns haven’t matched rocketing production, with the S&P 500 Oil & Gas Exploration Index losing 21% in the past 10 years, compared with a 177% rise in the wider market....
