Americas Oil: Finite Permian inventory means the return of the Red Queen

研报英文原文证据摘录

Americas Oil: Finite Permian inventory means the return of the Red Queen

29 July 2026

Americas Energy & Transition

Americas Oil: Finite Permian inventory means the return of the

Red Queen

“My dear, here we must run as fast as we can, just to stay in place. And if you wish Bob Brackett, Ph.D.

+1 917 344 8422 to go anywhere you must run twice as fast as that.” - The Red Queen of “Alice in

bob.brackett@bernsteinsg.com Wonderland” (Lewis Carroll)

Minnie Xu The shale industry has known for more than a decade that in order to keep shale oil

+1 917 344 8574 production flat (against >30% annual underlying declines), one must drill a significant minnie.xu@bernsteinsg.com

numbers of new wells. In this note we warn investors that in the coming decade as Permian

Raphael Lee inventory degrades to lower tiers, not only do returns degrade but the required

+1 917 344 8355 activity to hold production flat rises more exponentially than intuition suggests,

raphael.lee@bernsteinsg.com consuming more available free cash flow.

Our analysis finds that in the coming decade(s), the increase in the number of new wells

having to be drilled will rise 2.3x in order to offset worsening productivity (Exhibit 21). We

don’t believe the industry (or specific companies) would pursue such activity levels and

rather let the Permian mature into a slow decline.

Our finding is consistent with observations around (1) industry consolidation of shale

inventory, (2) renewed industry focus on improved recovery including secondary recovery,

(3) record acreage lease prices occuring this year, and (4) international expansion ambitions

of large cap E&Ps (given the long planning cycles of companies, now is the time to act).

In this note we: (1) map Permian remaining inventory, (2) convert the inventory into cost