Shale explorers are facing almost $12 billion in losses this year from bad bets on oil after a global rally, according to BloombergNEF.
Of the 50 U.S. drillers surveyed by BNEF, Devon Energy Corp., Pioneer Natural Resources Co. and Diamondback Energy Inc. are on track to rack up the steepest losses, with more than $1 billion in underwater hedges apiece. It’s the sector’s worst hedging performance in records dating back to mid-2017. The group as a whole hedged almost one-third of estimated 2021 output and the practical impact is that they are locked in to reap about $5 less than the American benchmark crude, West Texas Intermediate.
