Shale boom is in the 3rd inning; investors to decide how game plays out

Recent media attention questions the future of shale oil production in the U.S. Will capital discipline put a brake on growth or will domestic production rise to the point of undermining prices again? As so often in business, it’s the investors who will make the call.

In the first inning of the shale boom, from 2009 to 2014, the mostly small players raced to lock up prospects by leasing land and drilling — but not necessarily completing — wells. These are the “DUCs” (drilled but uncompleted) described in many articles.

It was a land grab of epic proportions, the energy equivalent of “shooting the moon” in a card game of hearts. But even before the oil price collapse in late 2014, that strategy caused problems for overextended companies, such as Oklahoma’s Chesapeake Energy Corp…

 

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