Q&A: Kimmeridge says shale not ready to ramp up

Q&A: Kimmeridge says shale not ready to ramp up

New York, 14 March (Argus) — Private equity firm Kimmeridge Energy Management has taken on an activist role in the US oil and gas space in recent years, pushing companies to improve their focus on investor returns. Mark Viviano, a managing partner at Kimmeridge spoke to Argus on the sidelines of the CERAWeek by S&P Global conference in Houston last week about how investors want shale producers to respond to the current supply crisis and how the US E&P space is changing.

Can shale respond to the supply crisis?

It is unrealistic to think you are going to have a coordinated response from the US shale industry without government intervention, for obvious reasons. There are rules that prohibit these companies from having coordinated supply responses. These are companies that are answerable to their owners, particularly the shareholders. In my conversations with oil executives over the last couple of days, that messaging from their investors has not changed.

What will it take for firms to boost production?

The US is growing this year, we are seeing companies increase capital budgets versus 2021. The question is, would they re-accelerate that in response to the commodity price volatility? Most companies are going to be reluctant to do