Reinvestment rates by Lower 48 oil and natural gas producers hit an all-time low in the third quarter while free cash flow (FCF) hit a record high, according to new analysis by Rystad Energy.

Shale Producers

The Oslo-based consultancy examined 21 publicly listed U.S. oil producers, excluding the majors, that together account for 40% of expected 2021 domestic output. The group’s combined reinvestment rate in 3Q2021 was 46%, down from 53% in the same period last year and well below the historical average of above 130%, researchers said.

The reinvestment rate is calculated by comparing a producer’s oil and gas capital expenditures (capex) against cash flow from operations (CFO).

The group’s combined CFO, meanwhile, saw its strongest quarter in 3Q2021 since the second quarter of 2019,...