YGRN - Oil: Surprised By The Lack Of Production Growth? You Shouldn't Be

• The latest US shale capex/production guidance shouldn't surprise anyone.
• Reserved-based lending facility is challenged going forward meaning no more "growth at any cost".
• Producers learned the hard way that credit lines are not liquidity, so paying down debt is one of their biggest priorities going forward.
• And with ESG and climate change pressure on energy producers, it's them against the world. Banks are becoming more polarized in this arena.
• So don't be surprised to see more and more producers reiterate the words of paying down debt close to zero. Banks don't want to lend fearing external pressure, and E&Ps don't want banks. The feeling is mutual, so you shouldn't be surprised to see E&Ps building up a cash position, pay a variable dividend, and shareholders benefiting. This is where we are headed.

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