Restrained US shale set for cashflow pay-off

Rebounding oil prices have boosted company balance sheets, but debt remains the priority over growth

US independents enjoyed a fruitful first quarter in the shale patch, with many companies posting their first profits in over a year as WTI strengthened and free cash flow (FCF) started to recover. But despite better macroeconomic conditions, the sector remains cautious and intends to hold back annual capex, focused instead on reducing sizeable debt. US law firm Haynes and Boone estimates the shale sector recorded 54 bankruptcies over the past year. Companies that outlasted the worst of the pandemic managed to avoid filing for Chapter 11, though at the expense of rising debt. And for many small-cap operators, significant debt maturities are due this year and beyond. “Devon has no intent