Finance
Culture of Inflating Oil Reserves Helped Stoke U.S. Shale Boom
As the industry reels from the pandemic, some question whether oil reserves were as rich as some companies estimated.
Drone view of an oil and gas drill rig in West Texas, near Pecos.
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America’s shale revolution grew out of a well-orchestrated dance. For almost a decade, producers wooed investors by touting rosy estimates of how much crude oil they could profitably drill, and investors forked over money.
That ended last year, even before the global pandemic sent oil prices tumbling. Investors, after years of meager returns, began demanding that shale companies stop marketing mythical future barrels that would never earn a dollar. There’s still no truly standardized way to gauge how accurately companies count their reserves.