Shale Oil

The global price rout caused by the COVID-19 pandemic has some analysts foreseeing the onset of the demise of US shale plays with many financially-strapped producers filing for bankruptcy.

The dead cow is rising from the dead as activity within Argentina's Vaca Muerta shale play is now resuming as energy prices rise and lockdowns in the country to stem the spread of COVID-19 are lifted.

The US shale sector is said to have hit its bottom during 2Q when the WTI price turned negative amid oil price and demand destruction due to the COVID-19 pandemic.

The oil price and demand rout caused by the COVID-19 pandemic has devastated the global oil industry, including the US shale sector.

According to UK Energy Minister Kwasi Kwarteng, fracking in the country "is over" and the government has "moved on" to greener forms of energy in its bid to address climate change.

The one-two punch of the coronavirus pandemic and the Saudi-Russian price war caused WTI at Cushing to become negative for the first time in history in April.

During 1Q 2020, US shale independents Concho Resources, Diamondback Energy, Parsley Energy, and Pioneer Natural Resources all increased their hedges to the point where over 85% of their 2020 output is now hedged.

US crude output is expected to ramp up as OPEC plans to curb output in support of prices, which might not sit with the cartel.

US shale boom is said to have begun in 2006 with much of the production focused on shale gas.

Andrew Dittmar, a Houston-based Senior Mergers and Acquisitions (M&A) Analyst for Enverus, sees bigger energy majors coming in to acquire smaller shale players struggling through the current downturn.