Over the next five years, the amount of cash that gets put to work in U.S. shale fields will play a major factor in future output.
Right now few drillers have assets that are good enough to produce cash sufficient to cover the cost of future production. That means frackers remain dependent on debt, equity and other types of outside capital to replenish rapidly depleting wells.
"It's the secret fuel for the shale revolution — the U.S. capital market and the ability to get lots of money very quickly," said LeBlanc.
U.S. shale regions
Source: U.S. Energy Information Administration
At least some flows could start drying up soon. Last year shareholders began signaling to drillers that they want to start seeing a return on their investments after years of debt fueled growth. Now more drillers are exercising tighter discipline and trying to fund growth with cash generated from operations.
If drillers start dialing back reinvestment, annual growth rates could look more like 200,000 barrels a day, with better returns for shareholders, rather than 1 million barrels a day, said LeBlanc.
Still, he believes capital will remain available. For one, private equity firms still have a lot of dry powder to invest. (Dry powder is money raised but not yet invested.) Also, oil giants like ExxonMobil and Chevron have pivoted to U.S. shale fields, and they may increasingly redirect money to those operations from more conventional projects in places like Nigeria and Kazakhstan.