Oil & Gas Prepares for a Constrained Future – U.S. Oil & Gas Extraction Briefing – Third Quarter, 2020
Oil & Gas Prepares for a Constrained Future
Payne Institute Fellow Brad Handler has prepared a quarterly report on the upstream U.S. Oil and Gas (O&G) industry and how it is preparing to spend less annually in 2021 and 2022 than it did in 2017-19. Instead, companies in this sector are focusing on improving financial returns, strengthening financial condition and returning cash to investors. This translates to the companies: 1) targeting only their “best” opportunities, 2) seeking more cost and operating efficiencies, 3) continuing to lay off staff and to some degree 4) pursuing mergers. The emphasis on cost efficiency portends an even greater shift in relative activity to the Permian basin, including the less developed but prolific Delaware play. The third quarter of 2020 (3Q20) saw the industry begin to resume investment after significant curtailments in 2Q20. December 18, 2020.
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