The epidemic hits the U.S. economy and the oil and gas industry becomes bankrupt

The Wall Street investment bank Jefferies Group released the latest report stating that although the Federal Reserve and the U.

It is worth noting that although the "shale revolution" has led to a surge in U.
S.
oil and gas production, shale developers have been plagued by capital shortages, and it has become the most risky industry in the United States
.

The Institute of Energy Economics and Financial Analysis (IEEFA) conducted a survey of 34 North American shale producers and found that the cash consumption of shale practitioners far exceeds the cash gains, which once again proves that this is a speculative industry
.

IEEFA pointed out in the survey report that these 34 shale producers have been in a state of “long-term loss”.
The total investment in the past 10 years has exceeded revenue by US$189 billion.
Since 2017, the expenditure of these companies has exceeded operating cash flow.
The cumulative scale increased by US$29 billion, and the funds spent on capital projects in the second quarter of this year were US$3.
3 billion more than the funds obtained from the sale of oil and gas
.

In addition, although the capital expenditures of these 34 shale producers have been cut by an average of 45% compared with last year this year, to the lowest level since the oil price plummeted in mid-2014, they still ran out of cash flow and faced the risk of breaking the capital chain
.
So far this year, the revenue of these shale producers has plummeted from last year's 33 billion U.
S.
dollars to 11.
7 billion U.
S.
dollars
.

"In terms of finance, this (shale) production boom is a kind of financial collapse
," said Clark Williams Derry, a financial analyst at IEEFA and the lead author of the survey report.
"The shale industry is facing an existential crisis and begged the government to introduce supporting regulations.
This is the perfect proof that drilling has been unprofitable in the past 10 years
.
"

The US CNBC News Network pointed out that the poor financial performance of shale producers predates the global economic slowdown caused by the new crown pneumonia epidemic.
This is not only the result of the new crown pneumonia epidemic, but will be a long-term trend that will last for 10 years.

.

(Source: China Energy News)