Kotkoa/Shutterstock Save for later Print Download Share LinkedIn Twitter The shackles of capital discipline that have restrained US oil production growth this year won't be lifted anytime soon. Investors continue to demand tight capital discipline and robust cash distributions from US exploration and production (E&P) companies, and the industry's new operating mode — often referred to as Shale 3.0 — may be here to stay regardless of how high oil prices might go. In practice, this means publicly traded E&Ps must adhere strictly to a new financial performance standard that privileges low leverage, free cash flow, and generous capital return programs ahead of capital expenditure increases geared toward production growth or acquisition of prospective acreage. This contrasts sharply with investor expectations from prior years when growth was the priority, both in output and acreage.
