The Exxon/Chevron shale headline is interesting, as the oil majors have made some commitments to shareholders concerning investment and capital spending since the Pandemic began, and while they appear to be sticking to their projections, it must be increasingly uncomfortable to do so. This is because the economics now work in the Permian and the independents are back with a vengeance. Historically, market share arguments would be made to ramp back up again, especially as Exxon, Chevron, and Oxy likely have the lowest incremental F&D costs in the Permian. Chevron and Exxon have the balance sheet flexibility to stick to their plans and make further consolidating moves if the oil price pulls back – Oxy does not. All three companies would likely face investor backlash if they increased E&P spending today.
