Monday, 25 May 2020

US shale industry braces for wave of bankruptcies | Financial Times

US shale industry braces for wave of bankruptcies | Financial Times:

The biggest independent shale oil groups in the US reported a record combined loss of $26bn in the first quarter as the sector braces itself for a wave of bankruptcies over the next two years.

The collapse in crude demand brought about by the coronavirus pandemic forced more than $38bn in write-offs among top producers, according to analysis by Rystad Energy, sending net losses tumbling well below an average of $2.9bn in the past six years.

US energy groups have been caught in the eye of the storm as lockdowns aimed at stemming the spread of Covid-19 slashed energy demand and crashed the oil market.

The sweeping impairments reported by the 39 publicly listed US shale oil producers analysed by Rystad — which exclude majors and gas-focused companies — underline the pressure being faced by the industry as a result of the pandemic.

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