kassa! schreef op 22 maart 2020 21:42:
Frank Sinatra - My way - and now the end is near
The blistering growth rate of U.S. shale was already running on fumes at the start of the year, before the coronavirus spread around the world. Drillers were struggling at $50 WTI. With prices so far below that level at this point, the wheels are coming off of the shale complex.
“When and if global oil markets stabilize, investors should remain deeply skeptical of a shale-sector turnaround, given the industry’s financially feeble performance over the past decade,” IEEFA analysts concluded in their report. “Cautious investors would be wise to view shale-focused companies as high-risk enterprises characterized by disappointing performance, weak financial fundamentals, and an essentially speculative business model.”
A cross-section of 34 shale companies identified by IEEFA finds that they spent a combined $189 billion more than they earned over the past decade. That includes $2.1 billion in negative cash flow last year.
The U.S. shale industry is burning through cash so fast that even the state of Texas is looking at government rationed production targets. Texas Railroad Commissioner Ryan Sitton laid out his idea in an article for Bloomberg Opinion, proposing the commission institute a 10 percent production cut. It would mark the first time since the 1970s that the Railroad Commission regulated production.