Exploration & Production

US Shale Producers Fear Drilling Binge by ‘Bad Actors’

Rare period of profitability for battered U.S. shale producers threatened by overproduction, oil executives across the sector say.

Myles McCormick and Derek Brower, Financial Times

Mon, 01/25/2021 - 12:00 PM

US Shale Producers Fear Drilling Binge by ‘Bad Actors’

With the U.S. oil benchmark now trading at around $53/bbl, resisting the urge to start producing more crude may prove difficult for some U.S. shale producers, say executives including Matt Gallagher, an executive at Pioneer Natural Resources, who said: “There are going to be bad actors [who pursue] growth for growth’s sake.” (Source: Hart Energy)

U.S. shale producers, suddenly enjoying a rare period of profitability thanks to rising oil prices, are starting to worry that “bad actors” in the sector will spoil the rally with another drilling binge.

Less than a year after the oil crash forced the heavily indebted industry to slash spending and production, cash flows have turned positive. It comes as operators pledge to prioritize margins oversupply growth and investors over rigs.

But with the U.S. oil benchmark now trading at $53/bbl, most shale operators can turn a profit. Resisting the urge to start producing more crude may prove difficult, say some executives.

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