U.S. Shale Drillers Are Drowning in Debt
- Samson bankruptcy shows potential market impact of fallout
- Debt for 30 companies rises to above 40% of enterprise value
This article is for subscribers only.
As much as 400,000 barrels a day of oil production is at risk as U.S. shale companies like Samson Resources Co. run out of money and are forced to slow drilling.
Total debt for half of the companies in a Bloomberg index of more than 60 producers has risen to a level that represents 40 percent of their enterprise value. It’s a sign of distress that shows equity values falling in the face of oil’s crash, said Rob Thummel, a managing director and portfolio manager at Tortoise Capital Advisors LLC who helps manage $15.6 billion.