In Extremis: Crisis Mounts for Appalachian Shale Producers
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Key Findings
Eight frackers spill $73 billion red ink in "lost decade" as persistently low gas prices pummel sector.
2019: Another year, another gusher of red ink. Each year for the past decade, oil and gas exploration and production (E&P) companies with significant operations in Appalachia have failed to produce positive free cash flow, according to an IEEFA analysis.
Executive Summary
In total, eight of Appalachia’s largest producers collectively spent $73.4 billion more on drilling and other capital expenses than they realized by selling natural gas during the decade.
Faced with persistently low gas prices, these eight companies continued to struggle financially in 2019, recording negative cash flows of $427 million in the fourth quarter alone.
Negative cash flows for the full year, at $466 million, actually represented the decade’s best performance for these companies. Yet only two of the eight firms in the IEEFA sample, Cabot Oil and Gas and EQT, were cash flow positive for the year. Five of the eight companies— Antero Resources, CNX, Chesapeake, Gulfport, and Range Resources—reported negative cash each year throughout the decade.
