By Jinjoo Lee

American shale producers are in a midlife crisis: They know their best days of growth are behind them. Yet it's too early to call it quits, with oil demand expected to keep growing for a while longer. Many have combined forces, and some are spending extra capital to squeeze the most out of the acreage they have left. More recently, they have started looking abroad for shale.

In January, shale pioneer Harold Hamm's Continental Resources made its second acquisition in Argentina's Vaca Muerta shale play. The company also signed a deal to develop shale fields in Turkey. Another of the industry's early movers, EOG Resources, last year got licenses to explore shale in the United Arab Emirates and Bahrain. These moves are notable because most pure-play U.S. producers have focused on drilling in their own backyard. In recent years only major oil companies such as Exxon Mobil and Chevron have maintained big footprints abroad.

Back in the early days of the shale boom around 2010, American producers explored going abroad, according to Rob Clarke, U.S. shale analyst at Wood Mackenzie, referring to this initial period as "Global Shale 1.0." Shale is, after all, the most common sedimentary rock and found all over the world. But production in the Permian Basin was so prolific that companies quit exploration abroad. "One of the things that killed Global Shale 1.0 was the Permian," Clarke said.

Times have changed, and conditions are now ripe for a phase that Clarke calls Global Shale 2.0. The Permian Basin is still a gusher, but the wells aren't as prolific as they used to be. On average, Permian wells first drilled in 2016 in the Wolfcamp formation were estimated to produce 65 barrels per lateral foot drilled, according to Wood Mackenzie. Wells drilled last year are expected to produce 46 barrels per foot.

Frackers thus have fewer years of top-notch wells remaining. Large-cap North American producers on average hold about 7.5 years of high-quality shale drilling inventory, or those that generate 10% returns when the U.S. benchmark oil price is below $50 a barrel, according to Andrew McConn, research director at Enverus. Small and midcap producers fare worse, with an average of 2.5 years of high-quality shale inventory left.

That isn't nearly enough to last through the next period of demand growth. The International Energy Agency, which previously expected that oil demand would top out around 2030, estimated in its latest long-term forecast that demand for oil and natural gas would continue growing through 2050 if existing policies continue. The Organization of the Petroleum Exporting Countries, for its part, sees oil demand growing even beyond 2050.

"We're approaching the point at which we are going to have to find new sources of production. OPEC spare capacity is starting to shrink, U.S. shale is maturing. If demand keeps growing, where are those barrels going to come from?" said Dan Pickering, chief investment officer at Pickering Energy Partners.

So far, there are two countries with shale basins large and proven enough to move the needle: Argentina and Saudi Arabia. Argentina is where U.S. producers are looking, though, because it is more accessible to foreign investors. In 2026 through 2030, Argentina's Vaca Muerta is expected to add more than 700,000 barrels a day of production, double the amount U.S. producers are set to add over that period, according to Enverus.

Other countries with shale potential and that could be attractive for American investment include the U.A.E., Australia, Bahrain, Turkey, Libya, Algeria and Mexico, but these are still in the "exploration and appraisal phase," McConn noted. China and Russia have substantial shale reserves but pose too much aboveground risk for American companies.

This new phase of Global Shale 2.0 will likely be more targeted and informed than the prior attempt. When producers were looking at international shale about 15 years ago, Clarke said his research team tracked over 100 different shale basins where wells had been drilled or were going to be drilled. Now, that list has whittled down to about a dozen basins. Companies' knowledge of U.S. shale will come in handy abroad -- it helps identify basins with rocks that share similar characteristics and should lower exploration costs, he added.

Major oil companies Exxon Mobil and Chevron have an advantage because they are experts at operating abroad, as does ConocoPhillips, the largest pure-play U.S. exploration-and-production company. Chevron has a sizable position in Argentina's Vaca Muerta shale play and recently signed a memorandum of understanding to explore in Libya, which holds shale resources. Exxon last year signed an agreement to develop shale in Azerbaijan. Other large producers may have to draw on past experience: Devon Energy and Occidental Petroleum both have a history of operating abroad.

The market is already rewarding companies with a bigger international presence. Global oil producers' shares outperformed U.S.-focused names in the second half of 2025 in part because of concerns around U.S. shale maturity, according to Evercore. Exxon and Chevron's average enterprise value as a multiple of forward earnings before interest, taxes, depreciation and amortization is now about 77% higher than the broader basket of American producers. Over the past five years, that premium averaged 36%.

Since the oil-price crash about a decade ago, producers have been laser-focused on keeping capital budgets tight and cash returns high. To get ahead in the next cycle, they may need to bring back some of that wildcatter spirit.

Write to Jinjoo Lee at jinjoo.lee@wsj.com

(END) Dow Jones Newswires

February 10, 2026 05:30 ET (10:30 GMT)

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