By Liz Hampton
(Reuters) -Oil producer Diamondback Energy said the U.S. shale industry will continue to struggle to expand production at its current pace, with costs of new shale wells likely rising.
The aging of oil and gas wells, supply chain bottlenecks and investor focus on shareholder returns have led to slowing U.S. oil output gains, Diamondback Chief Executive Officer Travis Stice told investors on Tuesday during an earnings call.
Weak U.S. oil output growth has put the fossil fuel industry in the Biden administration’s cross-hairs. President Joe Biden has criticized companies for not lifting production faster and raking in massive profits as energy inflation hits consumers.
“It certainly seems like the rhetoric has turned decidedly against the industry again in the lead up to these elections,” said Stice. The U.S. is holding its mid-term elections on Tuesday.
Midland, Texas-based Diamondback anticipates its own production will rise at a low single-digit percentage rate next year. Rivals Pioneer Natural Resources said it had faced lower-than-anticipated productivity on some wells in west Texas.
Diamondback acquired oil producer FireBird Energy last month, and that it would sell some $500 million in non-core assets by the end of 2023 and use proceeds to cut debt. Those sales will include certain assets in its Rattler Midstream portfolio.
(Reporting by Liz Hampton in Denver)
