Bigger oil looks set to have its day in US shale | Financial Times

Bigger oil looks set to have its day in US shale | Financial Times:

The shale energy revolution was not a feat of Big Oil. Independent exploration and production companies run by little-known executives fracked their way to a stunning rise in US oil and gas output over the past decade.

Big — or at least bigger — oil is set to have its day in US shale, however. Conditions suggest that E&P M&A will loom large in the early 2020s. A fragmented production system will fuse into bigger pieces. 

Several factors point to why. The early days of the boom were a manic time of exploring rock and issuing debt and stock. With crude prices above $100 a barrel, capital markets were obliging.

While production soared, investor returns did not. E&P companies as a group failed to cover capital spending out of cash from their operations. Now, with oil prices at $60 a barrel, investors are scarce.