HOUSTON—The oil and gas industry is coming back to life across U.S. shale plays, though the speed of the rebound so far is causing concern for some analysts.

“It is very aggressive—more aggressive than we’ve seen in prior cycles,” Robert Clarke, research director at Wood Mackenzie, said during the 2017 NAPE Summit business conference on Feb. 15.

Driven by the recent stability of oil prices at $50 a barrel, Clarke said the best U.S. energy companies are looking at double digit growth for 2017. However, the effect of such accelerated development might lead to higher costs and less efficiency for producers.

A leading indicator of the growing optimism in the industry is the rig count, which has been shooting upward for the past 14 weeks.

During the week of Feb. 10, U.S. drillers added eight oil rigs, bringing the total count up to 591—the most since October 2015, according to Baker Hughes Inc. (NYSE: BHI). Overall, the monthly rate of rig additions in the U.S. over the past four weeks is the highest it’s been since 2012.

“I think we’re at a point now where it’s going to be a bit challenging. It’s not that we can’t continue to add more [rigs], but costs are going to go up and that’s going to impact breakevens,” Clarke said.

As a result, Clarke predicts the industry could be entering a period where massive efficiency gains achieved during the downturn slow down.

On a brighter note, Clarke said opportunities are emerging for operators outside the “Delaware buzz.”

“The recovery is just not in the core of the core, it’s just not in the Permian. Plays like the Eagle Ford don’t die a quiet death,” he said.

As the industry recovers, Wood Mackenzie projects that 30% of all rigs added in the U.S. will go into the Permian. This leaves 70% of rig additions across multiple basins and multiple plays, Clarke said.

Going forward, Clarke said a modest demand growth is leading to a growing call on U.S. Lower 48 supply. Outside of the Lower 48 onshore production, supply is projected to be broadly flat to 2020, creating an opportunity for U.S. shale producers.

“The gap between global demand and non-U.S. global supply… that’s ours to go for,” Clarke said. “We want to provide a lot barrels for the global market, but we don’t want to be that last barrel because that last barrel sets the price.”

Emily Patsy can be reached at epatsy@hartenergy.com.