Earnings season is underway, and leading independents in the Permian Basin are preparing to release their fourth-quarter results for 2019 through the end of February. The upcoming results are broadly expected to show a cautious approach in an operating environment that remains tough. Even though production continues to hit new highs, growth is expected to slow, and operators could cut back their capex plans for 2020.
It is not all bad news, however. Shale drillers have been under an increasing amount of pressure from shareholders to show more financial discipline and focus on returns, and for some of the better-positioned players in the Permian Basin, this approach is paying off. Efficiency gains are allowing output growth to continue even as producers are treading more cautiously.
Diamondback Energy has already pre-announced its fourth-quarter production, which marked an increase in output. Expectations are also relatively positive for Pioneer Natural Resources and Concho Resources.