The natural gas market in the U.S. went into a deep slump earlier this year, a downturn that pre-dated the pandemic.
Much of the price decline can be chalked up to overproduction from U.S. shale companies, which drilled themselves into financial devastation. As a result, the gas sector made substantial cuts to spending and drilling over the past year. But the red ink continues.
However, more recent performances suggest that the same old problems remain. A group of nine Appalachian-focused shale gas drillers reported a cumulative $504 million in negative free cash flow in the third quarter, according to a recent report from the Institute for Energy Economics and Financial Analysis (IEEFA). It was the latest in a long string of losses. “These results follow a dismal decade for the Appalachian frackers,” the IEEFA analysts wrote.