Permian readies for 2019 boom

HOUSTON (Bloomberg) — The oil fields of West Texas don’t sit still for long.

Take Carrizo Oil & Gas Inc.’s operations, for instance. Just three months after moving drill rigs out of the Permian basin because of pipeline shortages, the Houston-based explorer is already talking about bringing them back in the middle of next year.

That’s one of several signs the end may be near for self-imposed slowdown executives call a “frac holiday.”

The result: Carrizo will reach an “inflection point” in 2019 where both production and cash flow begin to rise together, CEO Chip Johnson said on a conference call Tuesday. In other words, things will soon be booming again.

Permian legend Mark Papa, who was a pioneer of U.S. shale as CEO of EOG Resources Inc. from 1999 to 2013, agrees that pipeline shortages “should go away by year end 2019” and may even turn into a surplus.