Shale oil drillers bring out the knife

Cost cutting, not production growth, is now the sector’s obsession

A  new reality has taken hold in the US shale patch. Lower oil prices have forced producers to quickly pivot from the growth-at-any-cost mode that turned the US into the world’s largest oil producer to a relentless focus on efficiency and cost cutting. They have been more successful than most expected. Costs have fallen sharply over the past six months – by as much as 30% in some areas. At the same time, producers are squeezing about a third more oil out of every well they drill compared to the start of the year as they mobilise the best crews and equipment to drill on the best acreage. While shale has proven resilient through the downturn, the sharp fall in spending and the number of rigs a