A record but mature US oil industry is “peak” and has already fallen into its decline as it fights tariffs and lower oil prices, the Permi Pool's best game is the best game manager.
Crude oil prices have fallen to the new four-year low level this week after the pandemic in the middle of the recession of fears and OPEC countries and the unexpected productions of their Allies. As a global slowdown, in every industry, US oil producers quickly spread to lower drilling platforms and costs, which are now lower to profitability, including Texas Permian manufacturers Diamondback Energy and Coterra Energy, both of which kept their profits on 6 May.
“We believe that we are at the peak of oil production in the event of current raw materials,” said Travis Stice, Chairman and CEO of Diamondback before calling a needle in a letter from a needle. “As a result of their activity cuts, it is likely that our mainland oil production has reached its peak and will begin to decline in this quarter.
“It has a meaningful impact on our industry and our country,” Stice added. As the global economy goes, oil shot is done.
Diamondback, the largest oil producer, who is only focused on Perm, has grown the key to the industry. In fact, a warning from Stice was a wake -up call for all people in the industry who are already in hand, which was underway.
According to the company, this will reduce the number of drilling platforms by three and reduce one of its wells to ripen or fracture. Diamondback lowered its 2025 mid -year -old coaching of capital costs by $ 400 million to $ 3.6 billion, although oil volumes fall by only 1%due to increased efficiency.
Steel tariffs have increased the cost of wells in the wells by more than 10% and helps to reduce the level of activity, stice said.
“We are in this new administration and the” good master “just over 100 days.”
Tom Jorden, Chairman and CEO of Cotera Energy
Tom Jorden, Chairman and CEO of Cotra, said that it is likely to be “related” as a certain OPEC -led OPEC -led OPEC, and their allies announced on May 3 in their production quotas from another straight unexpected hike – if President Trump wants to push for lower oil prices.
“We are just over 100 days in this new administration and 'Good Lord',” Jorden said in a revenue speech on May 6. “There is a tremendous amount of volatility, whether we are talking about oil markets or tariffs and our relationships around the world. All of these are approaching oil price predictions. The president tries to do a lot of heavy things ahead and the white house is fast.
The bottom line is Cotera that this decline will last for a while, Jorden said.
“We were built for that. Cotera is ARK, not a party,” he said.
“We hope that these tariffs will be resolved and that the risk of the recession will be canceled, but our experience tells us that we cannot lead our program to hope, and we will be wise and make adjustments accordingly,” Jorden added. “We fight the hatch and expect it to last for a while.”
As Cotera is focused on both the oily Perman and Gassy Marcellus oil shale in Pennsylvania, the company cuts three of its ten Permian platforms, but adds two platforms to Marcellus Marcellus in the middle of health -healthier natural gas prices. This means reducing Perm Capex by $ 150 million and giving Marcellus $ 50 million.
“This is not a situation that turns off our capital program,” Jorden said. “It just redirects it and we have truly attractive gas opportunities we can turn to.”
Mature industry
According to the Federal Government, US oil production sits nearly 13.5 million barrels a day near a record rise, and almost half of the total number comes from Permian West -Texas and the new Southeast Mexico.
No other country, including Saudi Arabia and Russia, produces much more than 10 million barrels per day.
However, the US industry consolidates rapidly after the last two years of a transaction wave and relatively recent emphasis on capital discipline has ensured that shale oil manufacturers can turn faster to reduce their activity – as they do now.
Kimmeridge, a private capital company with an activist angle, published a white book this week, claiming that the fabulous Permian is at the beginning of the fall and that manufacturers want to grow in less active areas, including The Rockies and Canada.
“Despite the fact that constant hostility is facing many of the greatest energy production countries, the world seems to be sufficiently equipped with both oil and gas,” says Kimmeridge Paper. “But all the recent activities of energy mergers and takeovers throughout the northern American American implications that manufacturers have problems finding land inventory on land, the cost of which is continued to be developed in all main pools. Thus, here is the average average prospect paradox: northern American.
Indeed, Diamondback's Stice said on May 6th that the increase in efficiency is now the result of pennies, not dimed or quarter.
“As capital continues to be derived from the investment equation, the decline that we have will really increase,” Stice said. “This is where we are in the maturity cycle of reducing these resources.”
And both Diamondback and Cotra are coming to Perm's big acquisitions when oil prices were higher. On April 1, Diamondback ended its $ 4.1 billion in a Double Eagle, followed by a mass $ 26 billion buying last year. Cotera also closed its nearly $ 4 billion dollars in Franklin Mountain Energy and Avant for the acquisition of natural resources.
Diamondback President Kaes van Hof, who steps into the coach of the CEO this year, when StiCe resigns as an active manager, said that more decisions are now being made to maintain valuable stocks – drilling – and not just money to save money.
And today's oil price just “doesn't work”, he said.
“The US marginal barrel is simply not produced today,” Van't Hof said. “We are already seeing it in the action of Frac (cracking).
“We do not have crystal ball in the rest of the world, but we have a very good view of what the US looks like. Nowadays it is a business that slows down dramatically and is likely to decrease in production.”
This story was originally reflected on Fortune.com
