The US Domestic Oil Industry Closes A Remarkably Strong 2023

Ryan Lance (R), Chairman and CEO of ConocoPhillips, speaks while John Hess (C), CEO of Hess Corporation, and Daniel Yergin, Vice chairman of S&P Global listen during CERAWeek by S&P Global in Houston, Texas on March 7, 2023. (Photo by Mark Felix / AFP) (Photo by MARK FELIX/AFP via Getty Images)

As 2023 comes to a close, the United States is producing more oil and more natural gas than ever before, even in the face of efforts by government planners to force a move to other, greener, sources of energy. In fact, thanks to a major uptick in per-well recoveries in shale wells, the US is now producing more oil per day than any single nation has ever achieved. The fact that this has all been accomplished despite a domestic rig count that dropped by well over 20% during the year, according to Enverus, makes this one of the most remarkable outcomes in the industry’s long history.

This outcome becomes even more remarkable given that it comes amid a presidential administration whose leaders repeatedly stress their desires to end the industry within a decade and serves as a reminder of the industry’s extraordinary resilience. In a piece I wrote here in March, 2021, I noted, “The history of the oil and gas business in the United States is that every time the ‘experts’ all line up to declare it to be dead, it finds a way to come roaring back.” 

The reality is that these 2023 results represent a continuation of the nascent boom I wrote about in that 2021 story. At that time, I predicted that this burgeoning post-COVID boom would not be another drilling bonanza like the nation witnessed during the early days of the Eagle Ford Shale and the Permian Basin boom. Instead, it would be a more stable period of rising production and improving results created by adoption of new technologies, process efficiencies, economies of scale, and strong financial discipline.

And here we are, 33 months later, with the industry setting new production records and its corporate sector performing as well as any sector in the financial markets. Remarkable.