OILX - U.S. Shale Enters A New Era With Recent Consolidations Marking The End Of High Production Growth

• Cycle bottom M&A indicate two things to us: 1) High implied decline in PDP resulting in inability to access to capital, and 2) no capital.
• A flurry of deals have been announced during the last two months, but the most notable one, in our view, was Pioneer buying Parsley.
• Parsley Energy was one of the worst offenders of the "grow at any cost" shale business model, and for it to sell at the bottom of this market cycle is telling.
• The shale treadmill has finally caught up to some of the worst offenders of the "grow at any cost" abusers, and at the stewardship of larger companies that have to answer to shareholder demand for return on capital, production growth will be much more tamed for US shale going forward.

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