Research

Game Changers in the Oil Industry

October 1, 2015
Game Changers in the Oil Industry Pixabay pixabay.com

The shale industry’s poor market position is due to both external market forces and questionable business practices.

As documented in this working paper, an EIA report documents how shale companies engaged in excessive borrowing, incurring an unprecedented level of debt from 2010 to 2014. Second, 2014 ushered in an unexpected drop in crude oil prices that undercut shale’s competitive price in the market. Third, many of the larger energy companies that had been investing in small and midsize shale oil companies substantially increased their borrowing after the 2014 price plunge.

Authors: Arkady Gevorkyan and Willi Semmler
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