U.S. oil production decline will be more material than most expect: William Blair's Neal Dingmann

Investment Recommendations - William Blair calls 10 exploration and production companies as outperforms, focusing on mid-cap names like Diamondback, Viper, and Perian Resources [1][2] - Analyst favors companies that can operate in a low price environment, such as Magnolia Oil, which has over 500,000 acres in the Eagleford with virtually no debt [9] Company Specifics - Diamondback is favored for its low well break-even point, making money even at $40-$35 oil, and its subsidiary Viper, the largest mineral company [3] - Magnolia Oil can leverage lower prices to buy assets cheaply and add to existing production [9] - Crescent Energy and Mock Natural Resources are also highlighted as smaller cap outperforms [8] Market Dynamics & Oil Prices - The analyst is non-consensus, calling for an oil bottom or inflection point [5] - US oil production is around 1350 万 barrels a day, but companies need to produce 500 万 just to keep that flat [6] - The analyst disagrees with EIA and IA estimates of $50 oil, leaning towards a more bullish outlook, aligning more with OPEC [7] - A floor at $60 for oil prices is suggested [4] Shareholder Returns - The energy sector is highlighted for its significant shareholder returns through buybacks, base dividends, and variable dividends [10] - Reinvestment rates for better companies like Diamondback and Magnolia are around 45%, allowing them to maintain production and pay dividends [13] - Companies are prioritizing shareholder returns now, potentially impacting future drilling and production growth [11][12]