Key facts
- Diamondback CEO Kaes Van't Hof said the company will not materially increase drilling next year.
- Diamondback reported $2.1 billion in third-quarter free cash flow and raised its 2026 dividend.
- ExxonMobil CEO Darren Woods said the company is not focused on volume targets.
- Wood Mackenzie's Nathan Nemeth said smaller operators are more inclined to drill more at higher prices.
The largest U.S. shale producers have kept drilling spending conservative in 2026 even as the average WTI crude price rose more than $20 a barrel from last year, according to a report by Oilprice.com published November 6. WTI has averaged $86.72 so far in 2026, compared with a 2025 average of $64.94.
Diamondback Energy, described in the report as the biggest Permian-only focused driller, signaled on its Q3 earnings call that it will not materially increase drilling activity next year. CEO Kaes Van't Hof told analysts: "I wouldn't say I'm unnecessarily cautious personally, but I think it's always good to prepare the company for a swing to the downside." He added: "It's not a good way to run an E&P just to be a perma bull."
Diamondback reported $2.1 billion in third-quarter free cash flow, raised its 2026 dividend and slightly revised up its production outlook for 2026. Van't Hof wrote in the shareholder letter that the base dividend is now up more than nine times since it was initiated at $0.50 per share in 2018. The company has used excess cash to repurchase bonds and shares and reduce debt.
Van't Hof said the macro backdrop is "highly volatile and impossible to predict" and that the timing of eventual global oil supply normalization is uncertain. He said there is no need for a formal 2027 plan because the company always produces one in February.
ExxonMobil CEO Darren Woods said on the company's Q3 earnings call that Exxon is "not real focused" on volume targets, emphasizing efficient capital deployment and technology. Wood Mackenzie's Nathan Nemeth said smaller and privately held operators would be more inclined to drill more, while larger producers are reluctant to commit to higher spending. The report also cited an unnamed E&P executive in the Dallas Fed Energy Survey saying it is "very challenging to select a planning price or budgeting price."