The ability by E&P companies to generate free cash flow is expected to be severely hampered by the plunge in oil prices, according to a recent Rystad Energy report, which projects free cash flow will drop to zero if oil prices remain at $30 per barrel.

“This is probably where we are heading in the coming months, which will be extremely difficult for E&P companies,” Per Magnus Nysveen, Rystad Energy’s senior partner and head of analysis, said during a webinar on March 18 discussing the findings of the report focused on the coronavirus impact on oil markets.

After a double whammy delivered by COVID-19 and a price war between Saudi Arabia and Russia, global oil prices have lost half their value in less than two weeks. On March 18, WTI crude fell a staggering 24% to $20.37 a barrel—its lowest level since February 2002.

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