Wall Street’s ongoing pursuit for E&Ps to prioritize investor returns over growth could be driving some U.S. shale producers back into financial distress.

“Absent significant changes in oil prices or renewed access to capital markets, an additional wave of E&P bankruptcies might be forthcoming,” Paul Jansen, managing director of Conway MacKenzie’s energy advisory services, told Hart Energy.

Behind Jansen’s prediction is the industry’s shift to a lower growth mode being pushed over the past year by Wall Street. E&Ps have largely met these investor demands by retooling their budgets to lower spending. However, Jansen said this has set off a chain reaction leaving some producers, particularly the smaller E&Ps, financially hamstrung.

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