Oil’s climb towards $100 tempts US shale companies to shed restraint

Oil’s climb towards $100 tempts US shale companies to shed restraint

Oil’s vault above $95 a barrel is tempting US shale energy executives to fire up drilling rigs in search of more crude, risking the wrath of Wall Street in the process.

A sector once known for debt-fuelled production binges that made the US the world’s biggest oil supplier has largely embraced financial discipline, with executives pledging never again to outspend cash flow and burn through capital on costly projects.

But the rebound of oil markets to the highest levels since 2014 is challenging that resolve. The response from shale companies will determine the path of US oil output that is languishing well below its pre-pandemic peak.

“In the back of everyone’s minds is, ‘When is it going to be [production] growth? . . . We have investors saying ‘My gosh, if not now, when?’” Rick Muncrief, chief executive of Devon Energy, said in an interview.

“But for every one saying that, there’s at least one other if not two others waiting to say, ‘Gotcha! We knew that discipline would be shortlived.’ We have learned our lesson,” said Muncrief, whose Oklahoma City-based company is one of the biggest producers in the US shale patch.

The big public independent companies, such as Pioneer Natural Resources, EOG Resources, Diamondback Energy and Devon