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Sightline/IEEFA update: U.S. fracking sector disappoints again

August 19, 2019

Free Cash Flow at 29 Fracking CompaniesAugust 19, 2019 (Sightline/IEEFA) ‒ A review of 29 major fracking-focused oil and gas companies revealed meager cash returns in the second quarter of 2019, according to a briefing note released today by Sightline Institute and the Institute for Energy Economics and Financial Analysis (IEEFA).

The report, U.S. Fracking Sector Disappoints Yet Again, notes that only 11 of the 29 companies under review registered positive free cash flows. All told, the 29 companies generated just $26 million in aggregate free cash flows—too little to make a significant dent in the more than $100 billion in long-term debt they owe.

“There were winners and losers this quarter, but overall, the oil and gas sector is still underperforming on virtually every financial measure,” said Clark Williams-Derry from Sightline Institute who co-authored the briefing note.

The analysts found that:

  • U.S. fracking-focused oil and gas companies registered largely mediocre results during the second quarter of 2019
  • The E&Ps reported only $26 million in free cash flows from April through June 2019, a modest amount compared to over $100 billion in the companies’ long-term debt
  • Investors have soured on the sector, limiting the industry’s ability to tap into debt and equity markets.

Investors should continue to view the sector as highly speculative

“As underwhelming as these results were, they were an improvement over previous quarters,” said IEEFA director of finance Tom Sanzillo. “Still, investors would do well to remain skeptical and view the sector as highly speculative.”

Free cash flow measures the amount of cash generated by a company’s core business minus its capital spending. Sightline and IEEFA consider free cash flow a critical measure of financial health.

“Normally, positive free cash flow gives companies the ability to pay down their debt and reward stockholders, but so far, the fracking sector has been largely unable to achieve this,” said IEEFA financial analyst Kathy Hipple.

Much of the positive cash flow was attributed to one company in particular ‒ EOG Resources ‒ that posted $1.1 billion in free cash flow for the quarter, a turnaround of $1.5 billion quarter-over-quarter.

At the close of Q2 in 2019, the oil and gas sector was near the bottom of the Standard & Poor’s 500. By August 15, the sector hit rock bottom, with drilling, exploration and production and equipment and services leading the decline.

“Even the positive returns from EOG Resources failed to stop the downward slide of the company’s stock price,” said Williams-Derry. “Fracking remains a highly tenuous proposition for investors.”

Free Cash Flow, Selected E&Ps (Million U.S. dollars)

Company Stock   Symbol Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019
Apache Corporation APA              96              64            (25)          (265)              53
Anadarko Petroleum Corporation APC          (505)              33            335          (260)          (526)
Antero Resources Corporation AR          (266)          (146)            287              67          (124)
Chesapeake Energy Corporation CHK          (232)            (57)          (126)            (74)          (178)
Continental Resources CLR              11              98            175            (32)            (21)
Cabot Oil & Gas Corporation COG              43            (18)              69            390            101
Callon Petroleum Company CPE            (79)            (41)              (4)          (119)            (16)
Carrizo Oil & Gas CRZO            (59)            (64)          (301)            (46)            (15)
Concho Resources CXO            124            (85)          (198)          (282)            (97)
Denbury Resources DNR              68              60              20            (24)              54
Devon Energy DVN            (48)            236            (78)          (182)            116
EOG Resources EOG            258            540            783          (393)        1,124
EQT Corporation EQT          (327)          (257)          (346)            500              49
Diamondback Energy FANG          (192)          (173)      (1,407)          (411)          (154)
Hess Corporation HES            (68)          (117)            217          (433)              51
Laredo Petroleum LPI            (50)            (37)            (25)            (78)              45
Marathon Oil Corporation MRO            129            194            171          (100)            150
Matador Resources Company MTDR          (162)          (563)          (106)          (157)            (65)
Noble Energy NBL          (499)          (110)          (130)          (235)            (78)
Oasis Petroleum OAS              22            (77)            (74)            (63)            (74)
PDC Energy PDCE            (62)            (58)              45            (90)            (25)
Pioneer Natural Resources Co. PXD              64          (104)          (187)          (209)            (43)
QEP Resources QEP          (186)              27            (78)            (87)            (36)
Range Resources Corporation RRC          (113)              20              26              47            (14)
SM Energy Company SM          (275)            (80)          (100)          (131)            (67)
Southwestern Energy Company SWN            (82)            (17)            (30)            184          (227)
Whiting Petroleum Corporation WLL              99            (67)              48            (47)              (9)
WPX Energy WPX            (56)          (129)          (232)          (179)              39
Cimarex Energy Company XEC            (43)            (66)            (50)          (100)              13
Total, selected E&Ps        (2,390)          (994)      (1,321)      (2,809)              26



Clark Williams-Derry ([email protected]) is Director of Energy Finance for Sightline Institute

Tom Sanzillo ([email protected]) is IEEFA’s director of finance

Kathy Hipple ([email protected]) is an IEEFA financial analyst

Full Report: U.S. Fracking Sector Disappoints Yet Again

Media Contacts: Vivienne Heston ([email protected]) +1 (914) 439-8921

Anne Christnovich ([email protected]) +1 (206) 498-1887

About Sightline

Sightline Institute is an independent, nonprofit research and communications center. More can be found at


The Institute for Energy Economics and Financial Analysis conducts research and analyses on financial and economic issues related to energy and the environment. The Institute’s mission is to accelerate the transition to a diverse, sustainable and profitable energy economy.

Tom Sanzillo

Tom Sanzillo is Director of Financial Analysis for IEEFA. He has produced influential studies on the oil, gas, petrochemical and coal sectors in the U.S. and internationally, including company and credit analyses, facility development, oil and gas reserves, stock and commodity market analysis, and public and private financial structures. He also examines such areas as community and shareholder activism, institutional investment, public subsidies and Puerto Rico’s energy economics.

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Kathy Hipple

Former IEEFA Financial Analyst Kathy Hipple is a founding partner of Noosphere Marketing and the finance professor at Bard’s MBA for Sustainability. She worked for 10 years with international institutional clients at Merrill Lynch and then served as CEO of Ambassador Media.

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Clark Williams-Derry

Clark Williams-Derry focuses on the finances North America’s oil, gas, and coal industries. His areas of expertise include: the long-term financial performance of North American oil & gas companies, particularly fracking-focused enterprises; company- and basin-specific studies of oil and gas production; U.S. LNG exports in the context of global markets; and U.S. and Canadian coal export projects.

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