Jack McClendon

Executive compensation was tied to production growth.

And so you had a lot of incentives across the board to kind of grow production at all costs.

And, you know, due to, as I said, you know, there have been a couple of shale busts, right?

There was that shale bust in 15 and 16.

And then you have another, you know, you've had another kind of shale bust when COVID came along.

And along those, they've reformed a lot of those incentives.

And so, you know, companies are increasingly rewarded for rewarding shareholders versus focusing on kind of production growth.

I'll break that into two parts.

You know, I think the industry has had to do a lot of explaining and a lot of, you know, there's been a lot of kind of show me, you know, investors wanting to see that there actually is going to be some capital discipline.

And I think if you look really over the last two years, you know, we've seen that.

And I think even with this latest price spike, you've seen that.

I mean, people aren't rushing to deploy rigs.

I

because one of the largest private companies say they're going to increase capex.

I think for the most part, the industry has been able to attract more capital by actually showing that discipline.

I think part of that too is just you've had a lot of consolidation in the industry.

When I was first getting started as an investment banking analyst in 2008, I don't have the number off the top of my head, but it felt like there were 70-80 publicly traded companies

And, you know, now, I mean, with all due respect to lots of kind of midsize companies, there's really only about 10 companies that actually matter.

Right.

You know, as far as the publicly traded companies go and the two biggest ones who have really kind of started to corral the market for shale or Exxon and Chevron.