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Posted on 05/06/2025 2:30:06 PM PDT by Mariner
The head of the largest independent oil producer in the Permian Basin predicts US shale production has peaked and will likely decline from here as oil prices hover near four-year lows.
"We have a very good view of what the US looks like. And right now that's a business that's slowing dramatically and likely declining in terms of production," Diamondback Energy (FANG) CEO Travis Stice said during the company's earnings call on Tuesday morning.
Stice, who is slated to step down and become executive chairman later this month, issued a shareholder letter on Monday in which he pointed to declining crew count activity in the Permian Basin as an indicator that "production has peaked" and will begin to decline this quarter.
"We know a lot of people in the business," Stice told analysts. "Every single conversation I've had with ... operators is that this oil price doesn't work."
(Excerpt) Read more at yahoo.com ...
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It's a fantasy.
I'm waiting for gas prices to hover near four-year lows.
What if we hired 3rd worlders to do the drilling?
Why would we do that?
Maybe we could bomb Iran to increase production at very low prices?
President Trump's goal was to lower the price of energy; according to this article oil - one form of energy - is at a four year low.
I predict energy prices will continue to go up and down depending on demand and supply.
If shale is not economical now leave it in the ground and get it later when the economy sends a price signal.
Shale oil has peaked? We have not even BEGUN to tap the potential beneath New York State, or a number of other regions either. The shale oil may be deeper than now thought, but the resources are virtually limitless once the technology is brought online.
But I can see where the supply/demand price point could be a controlling factor.
There is a lot of shale oil. They have yet to scratch the surface .
It is all driven by product prices. If the price goes down, there will be less drilling. If the price goes up, there will be more. There is less Exploration when prices slide down, but more production, because shale plays are like manufacturing plays. You can’t explore on $40 oil, but you can manufacture product if you sell enough. On the other hand, if you are exploring, often you have to drill 10 dry holes to find a field, and the field has to pay for all the dry holes + the production costs. Having been in the Oil and Gas Business for over 40 years, I have been rich a few times and bankrupt a few times. Over the decades, it turned out to be a pretty good career, but I learned that you better be putting your profits back into the ground and not spending it on ridiculous stuff.
They need $58/bbl to keep existing production up.
They need $70 to consider opening new production. $75/bbl works better.
And the Saudi’s can pump and ship from existing wells at about $25bbl.
Biden gave anway our oil reserve. Now that prices are falling, fill up the SPR. It is around 350 million barrels short of capacity. Let the oil companies take a 2 dollar hair cut now for us filling up the reserve at a higher cost.
It certainly is a fantasy article.
Funny how production was able to ramp up fine 5 years ago and there was plenty of oil to go around but now there suddenly isn’t?
I had that same thought. Why not just cap the wells, wait for the price to rebound, and restart? It's already drilled, I assume you could resume production cheaply and immediately? I'm not an oil man, I'm just guessing.
We can take it a step farther, and start/stop production to affect the global supply, and therefore the price. Isn't that what OPEC does?
Roger that.
Oil is limitless at $100/bbl.
It becomes far more rare at $50/bbl.
Right, and the Saudis are messing with us because they have the opportunity. They plan and act for the long run, unlike consumers. They know if we have to slow production, it will take time for us to catch up when they cut again. If they get lucky, we will elect a Democrat who won’t drill anyway. This isn’t new from them, it’s what they do.
Didn’t Trump just re-open The Gulf?
Bet there’s any number of crew who’d be happy not working a drill head in subzero temps ever again.
So another boom and bust in the Texas oil industry?
What a surprise!
**Why would we do that?**
I dunno. The idea is to get more oil on the market. There’s gotta be a profit out there even for $25/barrel. Better than bombing Iran.
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