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Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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This Ain't Your Daddy's Shale Boom

  • The year 2023 saw the U.S. hit a record crude oil production level of over 13.2 million barrels per day.
  • Booming output was typical of the previous shale booms of 2012-2014 before the 2015-2016 price crash.
  • U.S. oil output overwhelmingly exceeded earlier forecasts and grew at a much faster pace in 2023, offsetting much of the OPEC+ efforts to push up prices by coordinated supply reductions.

Despite a decline in the number of drilling rigs, U.S. crude oil production jumped to record-high levels last year to blunt the impact of OPEC’s oil supply-management policies. The growth in U.S. shale over the past year was one of the biggest surprises on the market; while everyone expected production to increase, few had predicted that the rise in output would be so fast and so high.   

The year 2023 saw the U.S. hit a record crude oil production level of over 13.2 million barrels per day (bpd)—more than any other country in history.  

Booming output was typical of the previous shale booms of 2012-2014 before the 2015-2016 price crash, and 2018-2019 before the Covid-inflicted price collapse and pain on the industry. 

A decade of booms and busts and global markets—also influenced by decisions made by OPEC+ and OPEC—appears to have finally imparted a lesson to U.S. producers: drilling for the sake of drilling and raising production without profitability and returns to shareholders is doomed. 

After the pandemic crushed demand, sank prices, and triggered another round of bankruptcies in the shale patch, the U.S. oil industry now looks changed, and in a much better position to ramp up or maintain production even at lower oil prices. 

This time, the industry mindset is different from the previous cycles. Capital discipline, returns to investors, and paying down debts have taken precedence over increasing production at any cost. Meanwhile, efficiency has improved, allowing shale producers to pump more oil with fewer rigs by drilling longer lateral wells and deploying the rigs to the highest-yielding areas.    


Despite the falling rig count, U.S. crude oil production hit monthly record highs in the third quarter of 2023, boosted by productivity gains and more efficient operations. U.S. exploration and production companies are drilling longer laterals and deploying rigs to the most promising areas to get more bang for their buck. Related: Freezing Weather To Test Europe’s Natural Gas Supply Resilience

The oil and gas firms operating from the Permian to Marcellus shale plays are drilling increasingly deeper lateral wells as drilling rigs are fewer, but wells are longer.

Despite the loss of active drilling rigs, shale firms are producing more oil and gas and have even exceeded some skeptical projections from earlier in 2023. 

The total rig count was 622 in the last week of 2023, Baker Hughes estimated. In one year, the U.S. industry had lost 157 active drilling rigs, but U.S. oil production has grown by 1.377 million bpd, according to the most recent EIA data published on Friday.

The U.S. shale patch is now looking to do more with less as it seeks capital and operational efficiency to prove to shareholders that it has turned the page from growth at all costs to measured growth accompanied by higher returns to investors. 

Even some of the most prominent industry leaders have been surprised by the surge in U.S. oil production in 2023. 

For example, Scott Sheffield, chief executive of Pioneer Natural Resources, which will be acquired by Exxon, told the Financial Times in December that he was “very surprised” by the U.S. oil production growth—double the increase Sheffield expected one year ago. 

“Because of that there’s a good chance we may reach 15mn barrels a day within five years,” Sheffield told FT, referring to the expected U.S. crude oil production.   

U.S. oil output overwhelmingly exceeded earlier forecasts and grew at a much faster pace in 2023, offsetting much of the OPEC+ efforts to push up prices by coordinated supply reductions.  

U.S. production hit a new monthly record of 13.252 million bpd in September and kept the pace at 13.248 million bpd in October, according to data from the EIA. 

Many analysts predict that the U.S. oil output increase will slacken in 2024. But others, including industry officials, see the estimates of production growth by the EIA as too conservative for 2024 and believe that U.S. shale production could top projections again.


Thirty-three percent of U.S. industry executives expect their firm to increase slightly capital spending in 2024 compared to 2023, according to the latest Dallas Fed Energy Survey from December. The second most selected response was “remain close to 2023 levels,” selected by 26%, followed by “decrease slightly,” selected by 18%. 


The shale patch isn’t busting the capital discipline adopted after the price crash of 2020 and relies on productivity and efficiency gains.

Those efficiency gains may not peak in 2024, according to Robert Clarke, Vice-President, Upstream Research, at Wood Mackenzie. 

While total upstream capital spending in the Lower 48 states is set to drop this year, for a second year in a row, total Lower 48 production of both oil and gas will continue to rise, setting new records for each, Clarke said in WoodMac’s 10 predictions for energy in 2024. 

“Muted movement in the rig count will be more than offset by continued improvement in drilling speeds and pad cycle times, completion efficiencies and improved project execution,” Clarke added. 

“All this serves as a reminder of just how lean and mean US shale has become.”    

By Tsvetana Paraskova for Oilprice.com

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  • George Doolittle on January 05 2024 said:
    I think most are wondering just how much oil the US refining complex can process actually as there is simply so much oil going on forever now trying to turn so much into actual usable product is a challenge at the moment. Apparently this can be done but also there are questions about end user demand now as well. And this excludes natural gas which the USA produces even more of that now as well.

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