By Collin Eaton (fuelfix)
U.S. shale drillers and Canadian producers would need oil prices to skyrocket to $80 a barrel oil to finance operations without borrowing more money or cutting spending by a whopping 40 percent, consultancy AlixPartners said in a study released Thursday.
The gap in the cash flow they need to keep operating in shale oil patches across the United States isn’t nearly as large as it was last year, when AlixPartners said the industry lacked $130 billion on much lower oil prices.
But oil companies that haven’t already gone through bankruptcy proceedings or fixed their balance sheet problems by other means are still at a stark disadvantage. These firms have on average $26,000 for each barrel of oil equivalent per day they produce, twice as much as rivals that have already restructured their balance sheets. More than 200 North American oil producers and energy services companies filed for bankruptcy over the past two years, according to Dallas law firm Haynes & Boone.