U.S. shale producers to tap brakes in 2020 after years of rapid growth

Vastly slower U.S. oil growth this year and the prospect of a plateau for the wo...

HOUSTON - Vastly slower U.S. oil growth this year and the prospect of a plateau for the world’s top oil producer have signaled a new and unfamiliar era of self-restraint for the go-go shale industry.

Over the latest decade, the shale revolution turned the United States into the world’s largest crude producer and a force in energy exports. Yet the revolution did not translate to higher stock prices. The S&P 500 Energy sector only gained 6% for the decade, far less than the 180% return for the broader stock market.

“The drumbeat has been loud and uniform from investors,” said Parsley Energy Chief Executive Officer Matt Gallagher. The shale producer’s spending next year will drop about 15% and will not rise even if oil prices do, instead using higher returns to pay down debt, he said.“We had to be a competitive and profitable business, not just recover resource at all cost,” said Gallagher of the industry’s shift in thinking. Parsley started paying a quarterly dividend for the first time in September.

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