Tom Biracree

Industry executive surveys in Q2 2026 and observations by oil service firms all reflect an optimism that suggests producers are warming to increasing activity to boost oil and gas output. The key question is whether that has translated into higher investment.

Artificial intelligence is reshaping the global energy landscape faster than any technological shift in recent memory. Chevron’s Project Kilby, a natural‑gas‑fired power plant built specifically to supply an AI data center, represents a strategic pivot for Chevron into a new business vertical.

M&A activity in the oil and gas minerals/royalty space had quieted during a prolonged wave of major E&P consolidation. As that activity winds down, rising realizations for both oil and gas have spurred a major consolidation among royalty trusts as well as a recent successful initial public offering.

Given that the Iran war-driven surge in oil prices doubled Q1 E&P profits, a surge in capex to capture fatter cash flows seemed like a sure thing, but that would have been a losing bet. Today, we review oil and gas producers’ investment and production guidance and analyze potential future strategy.

The energy industry touts vast U.S. oil and gas resources, but increasingly limited volumes that can be practically and profitably developed have left producers struggling to replace proven reserves. Today, we analyze the trends that are limiting the industry’s ability to ramp up future output.