An oil pump jack works at dawn in the Permian Basin oil field in the town of Andrews, Texas. Spencer Platt/Getty Images/AFP
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U.S. shale producers survived an oil price crash and confounded OPEC's efforts to drain a global glut by employing innovative drilling and production techniques. Now, some of these producers are turning to creative investments to pump more oil. Drilling joint ventures, called "drillcos" for short, combine cash from investors like Carlyle Group LP with drillable-but-idle land already owned by producers. Driven by shale expansion, U.S. oil production this year is forecast to increase by 570,000 barrels per day (bpd) to 9.9 million bpd, the U.S. Energy Information Administration estimates.Drillcos take control of drillable land and generally turn over 100 percent of the cash flow from oil and gas production to investors until they earn a 15 percent return. Companies such as EOG Resources Inc., one of the financially strongest U.S. shale producers, are turning to drillcos.Legacy Reserves LP, Exco Resources Inc., Alta Mesa and EOG are among 34 oil producers that since 2015 have formed drillcos worth more than $2.05 billion.
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