Saudi Arabia-induced oil price war, coupled with falling demand for coronavirus, is likely to be disastrous for American shale drillers such as Chesapeake (NYSE: CHK) and Whiting (NYSE: WLL ) who were already trading at troubled levels, Joe of Bloomberg. Carroll writes.
With WTI futures reaching $ 30 / barrel, more defaults and bankruptcies are almost certain.
“After spending hundreds of billions of dollars in cash over the past decade, the industry has consistently disappointed investors while accumulating huge debts. He now finds himself in a corner, more and more closed to the financial markets. after canceling up to $ 1 billion in shale loans last year. This could mark the end of an historic boom that has resulted in the United States dominating global crude oil production. “
“This industry has been shot in the foot with dramatic growth in shale production.” Drillers need “a dose of self-help,” says Dan Pickering, founder of Pickering Energy Partners. “It’s sort of against the world right now.”
“The vultures are already spinning. What is the appetite of investors to refinance a new shale cycle? Amy Myers Jaffe, senior member of the Council on Foreign Relations, said.