MARCH 8, 2023 | THE WALL STREET JOURNAL
The United States’ oil boom, which propelled the country to the world’s top oil producer, is slowing down. The rate of shale growth is nearing its peak as frackers hit fewer big gushers in the Permian Basin, the country’s busiest oil patch, and shale companies’ biggest and best wells are producing less oil. The atrophy of once-booming sweet spots has implications for the global oil market, which years ago could count on rapidly growing US oil production to blunt the effects of supply disruptions and rising demand. It is expected that the industry’s inventory constraints will push companies to tap lower quality wells that require higher oil prices to attract investment. Oil output from the best 10% of wells in the Permian Basin’s Delaware portion was 15% lower last year on average than 2017’s top wells. This recent degradation in well performance has stoked executives’ and investors’ concerns about the industry’s runway for growth and has led companies to consider mergers this year.
