In today’s volatile energy landscape, shale operators are leaning into a familiar playbook—one forged through cycles of boom, bust, and adaptation. With WTI prices hovering around $60, executives across the U.S. oil patch are recalibrating operations and capital plans while reaffirming confidence in their long-cycle strategies built on cost discipline and optionality.

💸 $60 Is the New Normal for Shale Strategy

The industry consensus is forming around $60 as a mid-cycle baseline, offering a durable benchmark for capital planning. Ryan Lance, CEO of ConocoPhillips, was direct in his Q1 2025 remarks:

“$60 is pretty close to our mid-cycle planning price. So you shouldn’t expect a lot of things to change out of our company at these kinds of prices, because we’re built for it. We can handle the volatility.”

Clay Gaspar, President & CEO, echoed that price stability doesn’t mean complacency:

“The forward curve is relatively flat… hovering around just under $60. We’re watching that… when the market gets a little closer to the low $50s… we’d be more likely to take more aggressive actions.”

🛢️ Inventory Depth at $40: The Ultimate Hedge

A major advantage for top-tier operators is deep inventories that remain viable even in low-price environments. Conoco’s Lance emphasized:

“We have decades of inventory below our $40 per barrel WTI cost of supply threshold.”

Diamondback CEO Travis Stice reinforced the same idea:

“Our shareholders are lucky that Diamondback has such a long inventory… it allows us to be more insulated from [price declines] than other investment opportunities.”

This cost buffer is what allows these companies to stay steady while others cut back.

📉 When Prices Fall — What Gets Cut and Why

Even with resilience, operators are pulling back where necessary. Travis Stice explained Diamondback’s recent CapEx pivot:

“Taking $400 million out of our capital budget and three drilling rigs and one frac spread allowed us to maximize the CapEx reduction while minimizing volume impact.”

He also clarified the thresholds that trigger such moves:

“Red is probably something with a four in front of it… green needs to be somewhere in the mid to high 60s with a path to 70.”

📊 Buybacks Over Dividends in a Tightening Supply World

With oil prices under pressure and cash flow management critical, operators are prioritizing buybacks over growing dividends. Kaes Van’t Hof, President of Diamondback, explained the logic:

“We see our dividend as a fixed obligation, and every million shares we get rid of in the market is a $4 million reduction annually to our dividend payment.”

ExxonMobil’s Mike Wirth took a similar stance, emphasizing that consistency, not price chasing, defines their approach:

“We introduced a $10–$20 billion buyback range two years ago… Our current pace remains consistent with that approach.”

🧾 Tariffs: A Manageable Drag, But Not Ignored

While energy goods have largely been exempt from tariffs, their secondary impacts—especially on materials like casing—are being felt. Travis Stice pointed to specific cost inflation:

“The cost of casing is $650,000 a well now, and that is up 12% quarter-over-quarter due to tariff impacts.”

Danny Wesson added:

“There’s a lot of volatility out there right now with input costs and tariffs.”

Meanwhile, Exxon’s Darren Woods took a pragmatic view:

“None of that’s going to change with tariffs… we’re going to continue to be a very cost competitive, low-cost-of-supply source.”

Chevron’s Mike Wirth added clarity on exposure:

“Our current estimate is a ~1% impact on shale well cost. So, the impact is not zero, but it is manageable.”

Occidental CEO Vicki Hollub named tariffs as part of a wider set of headwinds:

“From tech trade and tariffs to the return of OPEC+ volumes, oil markets are under pressure from multiple fronts.”

🧠 What This Means for the Road Ahead

Price volatility, input inflation, and policy uncertainty are not new. But what separates leaders in the shale space is their preparation and capital discipline. As Wirth put it:

“You get into an environment like this and you pull out the playbook… It’s very early to have a high degree of confidence in how this plays out… the trade and tariff situation has been dynamic.”

Operators are not only surviving the cycle—they’re managing it with deliberate strategies tied to shareholder value, operational flexibility, and long-view planning.

As shale continues to evolve, don’t expect knee-jerk reactions. Expect measured responses—and a clear eye on where $40 barrels are still profitable.