After growing rapidly, most smaller producers now have, on average, around six years of drilling locations that could generate returns at low prices, according to data provided to The Wall Street Journal by energy analytics firm Enverus Inc. Energy executives say those limitations will likely lead them to slow their drilling.

“Can private companies maintain this pace indefinitely? The answer is no,” said

James Walter,

co-chief executive of publicly listed

Permian Resources Corp.

PR -2.50%

, a new company formed by the combination of Colgate Energy Partners III LLC and Centennial Resource Development Inc. “There’s just not enough companies of scale, with enough quality inventory.”

The constraints will likely lead many private producers to level out activity or sell themselves to larger companies that would temper their growth, executives and analysts say. A pullback could crimp overall U.S. oil production. Private producers hold around one-fifth of the Permian’s most valuable acreage, analysts say.

Some private drillers said the Enverus inventory data was overly conservative but largely didn’t dispute that private companies lack the assets to keep growing rapidly. Some said supply-chain constraints and financial considerations were the main reasons they are slowing Permian drilling, not inventory.

The Wall Street Journal reported earlier this year that drilling inventory limitations have also made larger shale companies hesitant to return to their rapid, prepandemic growth.

The Permian’s crop of private oil producers is already showing signs of restraint. Despite oil topping $120 a barrel this year, they have dispatched about 22 new rigs since December, compared with last year’s deployment of 86 new rigs, according to Enverus. They have added just four since May, and are expected to maintain or reduce activity in the region next year, analysts said.

“They can’t be depended on long-term to fuel U.S. and global oil-production growth,” said

Stephen Sagriff,

an Enverus analyst. The number of rigs working in the Permian has recently declined by eight since a two-year peak in late July to 343, according to oil-field services company

Baker Hughes Co.

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Private drillers’ rapid expansion in 2021 figured into lofty projections that U.S. oil production would climb by about 1 million barrels a day or more for this year. The Energy Information Administration’s monthly data show Texas and New Mexico oil production in June—the latest month for which data was available—rose 2.1% from December.

The EIA has lowered its forecast to 690,000 barrels a day of growth this year. If private drillers continue slowing, U.S. oil output could come in hundreds of thousands of barrels a day below expectations, analysts said.

Mike Oestmann,

CEO of private-equity-backed Tall City Exploration, said he isn’t concerned about running out of inventory but estimates the costs to drill a well and bring it online are up about 40% over past year because of soaring costs for material and labor, and that the number of rigs working in the Permian appears to have reached a plateau.

Private companies in the Midland Basin, the eastern portion of the Permian, would run out of drilling locations viable at $60-a-barrel oil or less in about 5.6 years, on average, at their current pace, according to Enverus. They had an average of 5.8 years of the same inventory in the Delaware Basin, the western part of the Permian.

In a study earlier this year,

Wells Fargo

estimated the U.S. has about six to nine years left of shale-drilling locations, overall, that could generate sustainable returns with oil below $45 a barrel. The bank separately concluded that private companies had even less inventory than publicly listed producers, said people familiar with the analysis.

Smaller producers are running half the rigs in the Permian but only have roughly 20% of the area’s drilling inventory. Wells Fargo found the high drilling rates have depleted a large portion of their best remaining acreage, the people said.

In the Delaware Basin, larger companies Lime Rock Resources and Mewbourne Oil Co. have about seven to eight years of higher-quality inventory viable at oil prices below $45 a barrel, while Novo Oil & Gas LLC and Tap Rock Resources have less than five years, according to Enverus estimates.

Meanwhile, Endeavor Energy Resources LP had more than 13 years of such inventory in the Midland Basin, while others including CrownQuest Operating LLC and PetroLegacy Energy had about eight to nine years, and others including Hibernia Resources III LLC and Legacy Reserves had less than five years, according to Enverus.

Jason Churchill,

CEO of PetroLegacy, said his company isn’t planning on adding drilling rigs beyond the two it operates in the Permian, but it is still planning to grow, adding 40 to 50 new wells a year for the foreseeable future. If private companies did slow their growth, it would most likely be because they follow public companies’ example and return more cash to investors instead of investing in growth, he said.

Many private drillers are looking to sell themselves to larger public companies, now that deal appetite has grown with higher oil prices, motivating them to preserve more of their inventory, analysts and executives said. Others are choosing to continue drilling to quickly sell oil at elevated prices and distribute the cash to investors, they said.

“Every year, thousands of wells get drilled, and that shrinks the inventory life,” said

J McLane,

chief investment officer at private-equity firm Lime Rock Partners. “It makes the undrilled wells more valuable.”

Write to Collin Eaton at collin.eaton@wsj.com and Benoît Morenne at benoit.morenne@wsj.com