Shale EROEI Failing

Rigzone, which reports new finds and plays in the fossil fuel industry, complains that, US Shale Debt Increases as Drillers Push to Maintain Gains:

Shale debt has reportedly doubled over the past four years, according to a Bloomberg News analysis of 61 shale drillers, while revenue has increased just 5.6 percent. Many are spending at least 10 percent of their sales on interest …

“What is not clear from higher-level company data is if the industry (both large players and independents) can run a cash flow-positive business in both top-quality and in more marginal plays and whether the positive cash flow could be maintained when the industry scales up its operations,” [a research associate] noted. …

Furthermore, independent producers will spend $1.50 on drilling this year for every dollar in return, Bloomberg noted in February. Producers will have to drill 2,500 new wells a year just to sustain output of 1 million barrels per day in the Bakken, according to International Energy Agency.

Recent analysis by Energy Aspects show 6 years of progressively worsening financial performance by 35 independent companies focused on shale gas and tight oil plays in the United States.

I look back at the headline and wonder, what gains? These guys are slowly going under.

Update 20140529 A previous Rigzone article, Big Oil Spending More, Getting Less in Production:

Despite increased spending, oil majors are seeing flat or declining production as they struggle to replace reserves, according to a recent analyst report.

And several days before that, Energy Policy Forum asked, Are Shales a Bubble? h/t Resilience.org