Accelerating out of a flat year, North American E&Ps are positioned to lead a 6% growth surge in global E&P spending to a record $800 billion for 2014, according to predictions by analysts at Bernstein Research. The November report forecasts 9% annual investment growth by North American oil and gas companies — almost double the predicted growth rate of other international E&Ps — and largely by U.S. independents.

“This would mark a material uplift from the stagnant spending witnessed year-over-year (by North American oil and gas companies) in 2013,” the report said.

Rising cash flows resulting from a 3% strengthening of West Texas Intermediate pricing through 2013 should turbo-boost the trend. “Prices are 9% higher than the forward curve indicated they would be during fourth-quarter last year (2012), when most E&Ps were setting their budgets.” Henry Hub predictions have been in line with the forward curve prediction from that time period.

Organic cash flows were expected to increase by 25% in 2013. Bernstein estimates North American E&Ps’ capacity to spend in 2014 will increase by 11%.

Five U.S. E&Ps had announced budget guidance at the time of the report—Occidental Petroleum, Cabot Oil & Gas, Goodrich Petroleum, Continental Resources and Concho Resources—collectively indicating a 19% growth rate. Bernstein, however, noted that early reporters likely reflect a bias toward spending increases, but the trend “supports the view that spending will take a healthy step up.”

The report suggests that capex growth plans by Occidental and Apache Corp., which had not yet indicated guidance but announced growth plans in certain U.S. regions, highlights a trend that some global E&Ps are de-emphasizing international operations for greater U.S. investment.

The modeled growth rate could be at risk if North American E&Ps continue to spend less as a percentage of cash flow, a declining trend through 2012 and 2013, the report said.

The anticipated 6% global capex growth rate continues a 6% rise through 2013, but illustrates changing regional growth drivers. In addition to North American E&Ps, Russia and the Middle East will witness ramp-ups in spending, 11% and 12%, respectively. This is in contrast to 2013, in which Asia-Pacific E&Ps and European majors led the charge, but are now decelerating.

Bernstein projects international E&P spending to increase 5% in 2014, continuing to grow but slowing from 9% the previous year.

This reflects flat spending by majors, down from 13% last year; a modest 3% growth by Latin American E&Ps, largely by Pemex; and 5% growth by Asia-Pacific E&Ps, in contrast to 12% in 2013.

The deceleration in international spending growth will be driven by Brent crude prices, which have been flat over three years.