Big Oil hits record US output despite 49% capex cuts

MALAYSIA, 21 SEPTEMBER 2026 —

US oil production by the 30 largest exploration and production companies reached an all-time high in 2025, even as their capital expenditure fell 49 percent year-on-year, according to OilPrice.com.

The same group cut exploration spending by 11 percent to $4.8 billion and reduced acquisition outlays by 70 percent, the article said.

These thirty firms account for 43 percent of total United States oil and gas production, according to OilPrice.com. Despite the cutbacks, revenue for the group rose 7 percent while oil output climbed to a record level, the source noted.

"One of the clearest signals in this year's study is that oil production and reserve replacement are moving in different directions," said EY's Matt Melnar, as reported by OilPrice.com. The article explained that higher output despite lower capex stems from drilling efficiency gains, technological advances, and a strategic shift toward shorter-cycle, high-return assets.

Shale producers now drill longer horizontal wells—some extending three miles—allowing single rigs to tap more oil-bearing rock while completing multiple wells simultaneously, OilPrice.com reported. Operators deploy AI, machine learning, and predictive analytics to maximize production efficiency, cut costs, and extend well lifespans. Deep learning models analyze 3D and 4D seismic data alongside historical drilling logs to pinpoint high-permeability zones, while AI-driven geosteering systems adjust real-time trajectories for optimal yields.

For natural gas, AI continuously adjusts injection rates to maintain optimal liquid-to-gas ratios, the article noted. The US shale boom broke the traditional model of long, expensive offshore or mega-field projects, replacing them with wells drilled, fracked, and pumping oil within months.

However, Big Oil cannot indefinitely slash capex, OilPrice.com warned. Projects like Exxon Mobil’s deepwater Guyana operations require heavy upfront investments but minimal ongoing capital. Meanwhile, producers rely on drilled but uncompleted (DUC) wells to sustain output without new drilling. The US Energy Information Administration reported in May that the total DUC inventory dipped to approximately 4,972 wells—the lowest since 2013—marking 14 consecutive months of decline.

Completing an existing DUC costs around $5 million to $6 million, compared to $8 million to $10 million for a new well, according to the article. Yet reserve additions from discoveries and extensions declined 11 percent year-over-year, failing to fully replace production volumes for the first time in five years.

Natural gas reserves bucked the trend, increasing 14 percent year-over-year, with discoveries up 21 percent and surpassing production growth of 18 percent, OilPrice.com said. Reserve revisions turned positive for the first time in five years.

"As energy security, industrial competitiveness, and AI-related infrastructure investment shape markets, US natural gas is increasingly positioned at the center of key demand trends," EY’s Patrick Jelinek told OilPrice.com. The strength in gas reserves and discoveries suggests producers are positioning for a future where natural gas plays a strategic role in the energy system.

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