Shale drillers reaffirm oil output goals
The shale surge that’s tied down global oil prices shows no signs of abating, as four of the biggest U.S. drillers said they’re not backing away from lofty production targets for 2017.
In second-quarter earnings reports, EOG Resources Inc., Devon Energy Corp., Newfield Exploration Co. and Diamondback Energy Inc. all outlined goals on Tuesday that would help push U.S. output toward a record 10 million barrels a day next year. Even Pioneer Natural Resources Co., which trimmed the top end of its forecast because of delays in the Permian shale basin, still expects to increase oil and natural gas volumes by 16 percent at year’s end.
The reports suggest staying power for a supply glut that’s kept world oil prices on a roller-coaster ride this year, even as members of the Organization of the Petroleum Exporting Countries vowed to reduce output. The optimism from the U.S. shale fields followed quarterly reports last week that showed major international producers including Exxon Mobil Corp. and Royal Dutch Shell PLC are also learning to make money at $50 a barrel, less than half the peak that crude reached three years ago.
“In the best parts of the basins, shale is here to stay,” said Rob Thummel, managing director at Tortoise Capital Advisors LLC in Leawood, Kan., which manages $16 billion in energy-related assets. “Shale production is going up. It’s not a matter of if; it’s just a matter of how much.”