WTI Drops Below $98; Four Wells Coming Off Confidential List -- April 25, 2022

Active rigs:

$97.45	4/25/2022	04/25/2021	04/25/2020	04/25/2019	04/25/2018
Active Rigs	37	15	29	64	63

Monday, April 25, 2022: 48 for the month, 48 for the quarter, 207 for one year

• None.

Sunday, April 24, 2022: 48 for the month, 48 for the quarter, 207 for one year

• 37916, conf-->drl/A, Oasis, Fraser Federal 5300 32-35 5BR, Willow Creek, first production, 10/21; t--; cum 139K 2/22;
  

Saturday, April 23, 2022: 47 for the month, 47 for the quarter, 206 for one year

• 38500, conf, CLR, Whitman FIU 6-34H2, Oakdale, no production data,
  
• 37663, conf-->loc/A, Whiting, Lacey 12-1-3H, Sanish, first production; t--; cum 90K 2/22;
  
• 36521, conf-->PNC-->A, Hess, BB-State A-151-95-1615H-1, Blue Buttes, first production, 10/21; t--; cum 121K 2/22;
  

RBN Energy: E&Ps continue to prioritize rewarding shareholders as cash flows soar. Archived.

The 43 large U.S. E&Ps that we monitor posted record earnings in 2021 and tripled their cash flow — an extraordinary turnaround from a very tough 2020. But as big a story, at least for investors, is how those oil and gas producers are allocating their surging cash reserves. Their dramatic strategic transformation from growth at any cost to maximizing returns is expected to result in 2022 yields approaching 10% for some E&Ps, rates higher than the much broader S&P 500 sector and more than double the payouts of the oil majors, the former dividend kings. In today’s RBN blog, we discuss the cash-flow allocation of the major E&P companies and explain what it means for investors.

For more than a decade after the onset of the Shale Revolution, oil and gas producers concentrated on growth, grabbing vast swaths of acreage and spending aggressively on delineation and building out infrastructure. Industry capital expenditures significantly exceeded 100% of cash flow from operations to meet double-digit production growth targets. The spending typically was funded either by debt or stock issuances that diluted shareholder equity. Dividends were either insignificant or non-existent. Today’s cash allocation couldn’t be more different. The 43 major publicly traded E&Ps that we follow have slashed the percentage of reinvested cash flow to just 43% and are targeting flat to low-single-digit production growth.  Base dividends that are competitive with other industry sectors are being significantly augmented by additional variable dividends that represent an another 30% to 50% of cash flow. Instead of issuing equity, some producers are further boosting shareholder returns through stock-buyback programs. Others are pursuing “shareholder friendly” allocations to debt reduction or growing cash reserves.