Dog days for the wildcatters
The creditworthiness of independents is falling. Barely-positive cash flow and weak enthusiasm for consolidation may not be enough to save them
While US shale production volume continues its unremitting rise, the pioneers of the industry are struggling to keep their heads above water without injections of fresh capital. The latest firm to fail was Sanchez Energy Corporation on 11 August, with $2.275bn of debt. It was the 26th bankruptcy of the year and leaves the total just shy of the 28 that succumbed during the whole of 2018. Corporate law firm Haynes and Boone found that the 192 failures since 2015 involved more than $47bn of debt. It is not surprising that investors are losing patience. Free cash flow—which facilitates capital spending without outside financing or the sale of assets—is a key measure of financial health. The Inst
Also in this section
27 March 2024
Oil producers have to untangle the increasingly complicated relationship with their natural resources
26 March 2024
Strategic stocks have become as much a market management tool as a security of supply buffer, and this new tactic is likely to continue beyond the next election
25 March 2024
Low carbon intensity and sizeable projects such as Johan Castberg coming onstream in late 2024 suggest a robust outlook at least until 2030
22 March 2024
And the outlook for the country’s upstream appears to have improved following legal setbacks in 2023