After an up and down oil market this year, 2018 seems like it could be a better one for the industry. OPEC recently renewed its pledge to keep production down, which should lead to tighter market conditions and stable, if not higher oil prices. It's a forecast that has some shale drillers downright giddy, with several expecting to unleash a torrent of new oil next year to capture those higher prices. Here are five producers planning on high-octane growth next year.
The pedal to the metal
Centennial Resource Development (NASDAQ: CDEV) has been growing at a stunning pace since the private equity-backed company started operations last year. The Permian Basin-focused driller has already increased its oil production by 216% this year to an average of 21,108 barrels per day as of the third quarter. However, Centennial Resource Development is just getting started, aiming to boost oil output up to 60,000 barrels per day by 2020. That puts it on pace to deliver a 71% compound annual production growth rate over that time frame, which leads its peer group by a wide margin.
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A full tank for 2018
Parsley Energy (NYSE: PE) has also been growing at a breakneck pace, with its oil output up 63% year over year to more than 47,000 barrels per day in the third quarter. That's due in part to a series of acquisitions over the past year, which has significantly bolstered Parsley's opportunity set. That expanded resource position, when combined with Parsley's strong balance sheet, will allow the company to keep its foot on the gas in 2018. Currently, Parsley Energy expects to produce between 67,500 to 72,500 barrels of oil per day next year, which at the midpoint would be nearly 50% above its third-quarter level.
High growth with upside if oil stays higher
RSP Permian (NYSE: RSPP) is on pace to grow its oil equivalent production by a jaw-dropping 82% to 95% this year. Though that's off a low base of 29,000 barrels of oil equivalent per day last year and mainly because the company made a massive acquisition in late 2016, which provided a huge lift this year. Given its higher starting point and lack of a needle-moving deal, RSP Permian won't grow output quite as fast next year. That said, the company still expects to boost it by more than 30% in 2018 assuming oil averages $50 a barrel. However, given that crude is in the upper $50s right now, RSP Permian should generate more cash in 2018, which could enable the company to ramp up its activities and produce even more oil next year.
High-end oil growth this year, with more on the way
Concho Resources (NYSE: CXO) expects to end this year producing 27% more oil than it did last year, which is above the high end of its 24% to 26% guidance range. That keeps Concho on track to achieve its long-term target to increase oil output by a 20% compound annual growth rate through 2019. What's impressive about that pace is that it's off a much larger base than most shale rivals, since Concho produced 119,600 barrels of oil per day last quarter. To achieve such a high growth rate at a much higher production level shows the strength of Concho's resource base and its drilling prowess.