(Bloomberg) -- U.S. shale oil producers will increase capital spending by nearly a fifth next year as they deploy more rigs and inflation bites, according to Rystad Energy AS.
Expenditures will rise to $83.4 billion in 2022, the highest since the Covid-19 pandemic emerged in early 2020, with more than half of the increase due to “service price inflation,” the Oslo-based consultant said in a note Wednesday.
That dollar amount still is about a third lower than forecast levels in 2019, indicating that companies are more disciplined about basing production decisions on near-term changes in crude prices.
Closely held explorers have expanded drilling aggressively this year to take advantage of higher oil prices while their publicly-listed rivals resisted that urge and diverted cash to shareholders. In 2022, however, both groups will incur “significant” budget increases, the analysts wrote.
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