Shale drillers reaf­firm oil out­put goals

Northwest Arkansas Democrat-Gazette - - BUSINESS & FARM -

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.”

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