3 key insights: Cash flow trends of U.S. oil and gas producers

Evaluate Energy’s latest analysis of U.S. producers shows capital spending remained steady along with shareholder returns in Q2, despite expected oil price drops by year-end.

I recently conducted research into the financial and operating trends, including cash flow trends, of the major U.S. oil and gas producers. Using cash flow data, my aim was to highlight how far and how quickly operator spending strategies are changing in light of the current market.

As part of the research, I analyzed the capital spending and shareholder returns of 47 U.S-based companies* against the backdrop of oil and gas demand and price forecasts.

The following article summarizes my findings and sheds light on what operators and investors should expect in the U.S. oil and gas space for the rest of this year.

1. Capital spending remains stable despite a drop in operating cash flow

The group of producers recorded a $3 billion reduction in operating cash flow between Q1 and Q2. Despite this (as well as a forecasted drop in U.S. oil prices for H2 2025 and beyond) the spending of major U.S. oil and gas companies has not changed yet.

Cash allocated to capital spending, dividends, and share buybacks remained stable across the first half of 2025 at a combined total of $50.2 billion in both Q1 and Q2.

This suggests a continued deliberate commitment, so far, to existing budgets and spending plans, rather than an impulsive reaction to short-term price or cash flow volatility.

2. Producers are expected to maintain course throughout the year

The U.S. Energy Information Administration (EIA) is predicting major changes in oil and gas prices over the next six months. Oil is expected to dip below $50/bbl by early 2026, while gas prices are forecast to increase significantly.

In the past, such an increase in natural gas prices would have led to increased development for operators in the Haynesville, for example, where price increases may unlock previously uneconomic reserves.

However, we expect very few increases in capital spending and little widespread change in spending habits across the U.S. upstream space as a whole for the rest of 2025, due to:

• Latest capital spending guidance
  • Most U.S. producers spent around half of their current 2025 budget in the first six months of the year.
  • A number of U.S. producers announced reduced capital spending plans for 2025 throughout August as prices started to fall.
• A distinct lack of pressing debt-related concerns across the sector as a whole
• Commitments to dividend payments and buyback schedules

3. Operators and investors need to run their own analyses to uncover true industry value

Access to comprehensive data is vital for cash flow analysis and for gaining a full appreciation of where the industry is heading.

It is important to note that cash ‘‘trends’’ can be easy to skew. For example, a large company making an individual spend or cutting back in certain areas can mask a more prevalent trend among smaller producers.

For example, if we look at the combined debt repayment spending of all companies outside of ExxonMobil and Chevron, we’d see a significant increase in Q2 over Q1. Only through access to the full dataset do we see that this is not a widespread change in strategy, nor a shift enforced by external economic pressures. In fact, it’s driven almost entirely by a small handful of companies reducing debt after large, recent acquisitions.

Occidental Petroleum and APA Corporation, for instance, repaid a combined total of around $2.6 billion by themselves, as they clear up outstanding obligations related to their recent, respective acquisitions of CrownRock and Callon Petroleum. This figure represents half of the entire group’s debt repayment spending in Q2 excluding Exxon Mobil and Chevron, proving that it is not a widespread change in strategy.

Similarly, if we consider all the U.S. companies in my analysis, we see that buybacks are dropping off slightly in Q2 while capex and dividends are maintained at Q1 levels.

However, when we omit ExxonMobil and Chevron, the buyback drop-off decreases to a negligible $60 million (~1%) quarter over quarter, compared to a 7% drop with the two supermajors included. This suggests that the appetite for share buybacks had not yet dampened in the industry by the end of Q2, and is a great example of how the sheer size of ExxonMobil and Chevron can skew analysis.

*Author methodology: Mark Young analyzed the capital spending and shareholder returns of 47 U.S-based companies that produce more than 5,000 barrels of oil equivalent each day, and have a U.S focus in their operations. The analysis group includes the operators Chevron and ExxonMobil. However, in some instances, he omitted these two companies from his analysis given their ability to skew data based on their size.