If it is Good when production grows and commodity prices rise, and Great when the growth rate of production exceeds the growth rate of the commodity price, then the past 2 years have been a GREAT time for oil focused E&P in the Anadarko Region of Oklahoma. Based on EIA oil production data, the Anadarko has risen from 386,000 Bbls/day in January 2017 to 569,000 Bbls/day in November 2018 for a growth rate of 47%. At the same time the WTI oil price has risen by 32% from $52/BBL to $69/BBL. Since the last major production decline started 8 months after oil prices peaked in July 2014, it is too early to see if E&Ps maintain the current drilling pace, but we are optimistic since the WTI price has rebounded from the low $40’s in late December to the mid $50’s currently. What do you think?
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