The promise of future returns lured investors, including a wave of acquisitions from 2016-19. Now, many of those shale deals are financially unworkable due to low oil prices.
Even when U.S. benchmark prices return to $45/bbl, "very few" U.S. producers would be able to afford to expand production because of high debt levels, Pioneer Natural Resources CEO Scott Sheffield says.
The Harold Hamm-led American Gulfcoast Select is the first new crude benchmark since 2010, designed to more accurately price U.S. liquids being exported by tanker. Will it provide the value uplift as hoped?