Cracks Show in Permian's Promise as Shale Producers Retrench - Bloomberg

Cracks Show in Permian's Promise as Shale Producers Retrench - Bloomberg:

The promise of the Permian is shrinking.

Producers in the nation’s oil-rich shale basins are dialing back growth plans in the face of a growing panoply of problems that’s killing returns and keeping skeptical investors at bay.

The constraints are manifold: pipeline limits, reduced flow from wells drilled too close together, low natural gas prices and high land costs. But the most consequential is that shale-well production falls off at such a high rate -- as much as 70% in the first year -- that you need to keep spending cash on new wells just to maintain output.