Reserve Base Lending and the Outlook for Shale Oil and Gas Finance
DESCRIPTION: This essay aims to assess the general outlook for US shale oil and gas in a higher-interest-rate environment, a topic that has until now received surprisingly little attention compared with shale operational costs and efficiencies. To do so, the paper examines for the first time North American exploration and production (E&P) companies from a compiled financial perspective, with a focus on the impact of the collapse of oil prices to below $50 per barrel. Financial data from the top 63 E&Ps with S&P ratings between A and CCC have been compiled in order to identify industry-wide trends and behavior patterns. Financial and credit metrics are considered in aggregate for the purpose of analyzing sectorial trends, not to evaluate individual companies or assess their corporate strategies at the company level.