The tide is changing. It's finally here and I suspect the timing couldn't be any better. Just as everyone buys into the idea that President-elect Trump will somehow promote "drill baby drill", US shale crude production is all but plateauing right in front of us.
Over the past week, we've seen earnings reports from the likes of Diamondback, Exxon, Chevron, Permian Resources, Chord, Matador, and others. The earning calls gave us great insights into how the management team is thinking about the production profile going forward. The key theme change I detected was from the oil majors and I will explain why this is significant.
The Majors
A big part of why I thought US crude production wasn't peaking just yet was because of the oil majors, namely Exxon and Chevron. In particular, Exxon had lofty goals of boosting crude production further following the Pioneer Natural Resources acquisition.
A year ago when Exxon announced the acquisition of Pioneer Natural Resources, Exxon said at the time that it was targeting production growth to ~2 million b/d or +700k b/d from the end of 2023.
Source: Exxon
But I think reality will be a bit more different than what the company is projecting.
There are subtle signs that the growth trajectory will change. Namely, I think Exxon is starting to find out that most of the growth will be in NGLs and natural gas as opposed to crude.