US Oil and Gas Industry Hits Record Production Amid Shift in Capital Allocation

The US oil and gas industry has reached record production levels, but reserve replacement is now below 100% for the first time since 2021. According to an EY study, this divergence between production and reserve replacement highlights a shift in how companies are allocating capital.

Total capital expenditures fell by 49% year over year, with exploration spending declining 11% to $4.8 billion and representing only 3% of total capital expenditures.

Natural gas reserves reached a five-year high, supported by higher discoveries, exports, and rising electricity demand.