US Independents Q4 2022 earnings recap

US independents have finished reporting Q4 results this week, including key large caps ConocoPhillips, Occidental, EOG, Pioneer and Devon. We take a look at the aggregated data for these companies, adding some qualitative thoughts on trends in the quarter and for the full year. It was a record-breaking year for US Independent cash flow, the culmination of the first full upcycle for oil prices in the capital restraint/return of capital era. Q4 results were both a continuation of strategic trends, and a point of pivot on a couple of key dimensions. The group remains focused on maximizing shareholder distributions, disciplined investment, and modest production growth. But we’ve reached the end of prioritized deleveraging (in aggregate – there are still a few companies in balance-sheet-mending mode). Inventory quality and depth is back in the spotlight. Hedging has (finally) pivoted from headwind to tailwind.