Staying-the Course Despite Higher Prices

Payne Institute Fellow Brad Handler has prepared a quarterly report on how restoring attractiveness to shareholders continues to dominate U.S. public oil and natural gas (O&G) industry mindset. Thus far, company commentary for 2022 is to “stay the course,” i.e., (1) maintain spending at current levels despite commodity prices that suggest they can earn (and therefore spend) much more money and (2) give back more money to shareholders than they have historically. That leaves the expectation that private oil companies will continue to raise their spending faster than their public peers – and that U.S. oil production will only gradually continue to recover. This discipline, as well as operating efficiencies, also imply that industry hiring recovery is likely to remain muted.  December 9, 2021.