A top EOG Resources executive agrees U.S. shale oil production has likely peaked and is now in decline.

“I think U.S. shale oil has definitely slowed, there’s no doubt about it,” EOG COO Jeff Leitzell said June 24 in response to a question about peak U.S. oil at the JPMorgan Energy, Power, Renewables & Mining Conference.

U.S. producers are essentially caught between a rock and hard place: balancing capital discipline with steep shale well declines. 

Every year, the U.S. industry has “more and more decline that we have to backfill before you ever see any growth” in oil production, Leitzell said.

Most public E&Ps are more concerned with protecting their returns and cash flow than they are with boosting drilling and growing production.

“I think they could grow if they wanted to, but it would take drilling wells,” he said, which investors often equate with “degrading capital efficiency.”

Under the “capital discipline” model, public producers have shown less willingness to ramp up drilling in response to rising oil prices than in the past. E&Ps are also reluctant to “step out in lesser quality acreage” unless those projects clearly enhance their portfolios or deliver strong shareholder returns, Leitzell said.

The pressure on U.S. producers means shale oil production will “probably peak and plateau off a little bit” over the next few years, Leitzell said.

He joins a growing number of U.S. oil and gas executives predicting the end of the shale growth era.

In a first-quarter investor letter, Diamondback Energy CEO Travis Stice warned that low oil prices and macroeconomic uncertainty have likely caused U.S. onshore oil production to peak and begin declining, posing a serious threat to the nation’s energy security.

And Quantum Capital’s Wil VanLoh cautioned U.S. oil production to be nearing its peak at current prices—then around $63/bbl WTI—calling it a “dangerous assumption” to believe growth can continue given dwindling high-return drilling inventory.

Despite an uncertain macro backdrop, EOG remains confident in its ability to deliver. 

“Even if industry can't grow, our portfolio has never been stronger,” Leitzell said. “Our inventory has never been stronger.”

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Encino M&A

After almost a decade focused on organic growth, EOG Resources finally broke its M&A silence this year.

The company’s last large-scale M&A deal was in 2016, when EOG grew in the Permian Basin through a $2.5 billion acquisition from Yates Petroleum.

But amid a quiet start to upstream M&A in 2025, EOG made waves with two key acquisitions in Appalachia and South Texas.

EOG announced a $5.6 billion acquisition of Encino Acquisition Partners last month. The deal, with sellers Canada Pension Plan Investment Board and Encino Energy, includes $3.5 billion in debt and $2.1 billion cash.

The deal increased EOG’s working interest in northern Utica acreage by over 20%, where Encino previously held interests.

EOG doubled its acreage in the Utica’s volatile oil window to 485,000 net acres. The oil window is probably “the most prolific of the play” as it’s been tested today, Leitzell said.

Encino also holds “very premium gas acreage” and firm marketing and transportation agreements, which become increasingly valuable as natural gas prices rise, he added.

EOG aims to close the Encino acquisition in the third quarter.

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Eagle Ford M&A

In South Texas, EOG bolted on what it called the largest remaining undeveloped acreage in the core of the Eagle Ford Shale.

EOG acquired 30,000 acres in Atascosa County, Texas, from private seller Arrow S Energy Operating for $275 million.

The largely undeveloped acreage lies in the core of the Eagle Ford and is expected to generate strong returns even at bottom-cycle prices of $45 oil and $2.50 gas.

With nearby data, infrastructure and marketing agreements already in place, EOG plans to leverage its drilling expertise to get more out of the Arrow S land.

“It commands capital immediately. It competes in our portfolio,” Leitzell said.

Leitzell noted that while parts of the rock, especially in the western region, aren’t as strong as earlier eastern Eagle Ford developments, EOG’s advances in technology have unlocked value in areas once considered marginal.

The deal brings 120 new 3-mile lateral locations to EOG’s position in the Eagle Ford.

Longer laterals, refined subsurface targeting and improved completion designs position the newly acquired Eagle Ford acreage for immediate development.

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