Now, cracks are opening in that survival tale, with companies ranging from EOG Resources Inc. to tiny Laredo Petroleum Inc. dropping their 2019 growth rates by 3 percentage points to more than 40 below last year’s gains. “You’re having to spend more and more every year to grow at a faster rate,” said Noah Barrett, an energy analyst at Janus Henderson, in a telephone interview. “Companies routinely spent 120 to 130% of their cash flow never generating positive cash flow or earnings.” . . . The Permian has been the world’s fastest-growing major oil region over the past two years, growing 72 percent to 4.2 million barrels a day. But the pace of that growth is under threat as producers bow to investor demands to stop spending money.
Honestly, I'm not sure what exactly is being said at the beginning of this quote: "dropping their 2019 growth rates by 3 percentage points to more than 40 below last year's gains . . . " But the point is that shale growth in 2019 is lower than it was in 2018.
Backing into the raw numbers versus just the 72% gain, the Permian oil production has increased from 2.4 million barrels per day to the current 4.2 million.
The one thing is that over the last couple years, I've been reading about how investors are wanting a return on their investment and yet those returns don't seem to be realized. To me, wouldn't those in the Permian rather see perhaps a reduction in oil production, which would result in higher oil prices? Yet, the articles ends with this: “U.S. production in absolute terms will continue to grow,” he said. “But the pace of production increases will slow.” I'm not sure that positive cash flow will be coming with forecasts like that.
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