US write-downs equivalent to ‘bank bailouts’ for fracking

It seems that fracking continues to haemorrhage investor’s cash…

By my calculations $16 billion of write-offs definitely (those which could be substantiated through company reports); perhaps $25-$30 billion if you include the finance sector. A recent report from the Oxford Institute for Energy Studies (OIES) puts the figure at $35 billion. The OIES is not your average ‘bunch of greenies’ - they are hard headed energy economists.
frackwells.jpg

See page 4 of their recent report - US shale gas and tight oil industry performance: challenges and opportunities, Ivan Sandrea, OIES Research Associate, Oxford Institute for Energy Studies, March 2014.

Write Downs
Since the shale boom began, related write-downs by several of the largest shale players are now approaching $35bn, suggesting that some of these plays will not meet original technical and business expectations. Most of these large write-downs have been made by foreign players but also by some US players too. If one adds all unconventional-related write-downs, from both US and non-US companies, made during the last 10 years, the figure of write-downs increases significantly.”

If you want to put $35,000,000,000 into perspective, there’s a list of recent US bailouts here.

So, more than JP Morgan, but not quite CitiGroup!

(Original article by: Paul Mobbs)

Related articles: Is the U.S. Shale Boom Going Bust?
Other articles by Paul Mobbs: Behind every picture lies a story
Picture Link: Fracking Wells Abandoned in Boom/Bust Cycle. Who Will Pay to Cap Them?

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