Infill Thinking Lifting the O&G knowledge curve
Contrary to the click bait proliferating on other media platforms, US oil producers are not slashing 2017 tight oil investment programs as a result of recent crude oil price volatility.
Anadarko’s US onshore investment revision, which became the poster child for so called shale budget cuts this week, is grossly misunderstood. Not only has the press been fooled, but we’ve seen some smart analysts fall for it too.
How much of the oil price strength this week is riding on fake news of “shale budget cuts?” WTI is up about 7% and flirting with $50. We submit this oil price rally, which is actually emboldening US E&P to continue spending, is largely due to two factors conspiring together: i) misleading headlines that suggest shale is firmly in budget cutting mode and shaken by recent crude volatility, and ii) bullish oil inventory data (which we take no issue with).
In this piece, we dissect the budget revisions of the eight E&Ps that have reported earnings so far, putting the net impact into perspective.
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