{"id":36668,"date":"2018-08-14T09:30:00","date_gmt":"2018-08-14T14:30:00","guid":{"rendered":"http:\/\/olduvai.ca\/?p=36668"},"modified":"2018-08-14T09:30:00","modified_gmt":"2018-08-14T14:30:00","slug":"top-u-s-shale-producers-soaring-debt-service-guts-profits","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=36668","title":{"rendered":"Top U.S. Shale Producers Soaring Debt Service Guts Profits"},"content":{"rendered":"
\n

Top U.S. Shale Producers Soaring Debt Service Guts Profits<\/a><\/h3>\n<\/header>\n
\n

The massive debt accumulated by the U.S. Shale Industry is now decimating company profits.\u00a0 As company debts and interest rates rise, these shale producers interest expense also continues to increase.\u00a0 Debt service is not only cutting into company profits, but it also takes a great deal of oil and gas production to cover this expense.<\/p>\n

For example, 16 of the top U.S. shale energy companies racked up a hefty $5 billion interest payment.\u00a0<\/strong> The company with the highest annual interest expense is Anadarko Energy at a stunning $932 million in 2017:<\/p>\n

\"\"<\/p>\n

Devon Energy came in a distant second at $514 million while Chesapeake took the third spot at $425 million.\u00a0 The 16 shale energy companies shown\u00a0on the right-hand side of the chart are listed from highest to lowest annual interest expense for 2017.\u00a0 And, it is a simple rule-of-thumb that the higher the annual interest expense, the higher overall debt on the company\u2019s balance sheet.<\/p>\n

Anadarko has such a high annual interest expense ($932 million) because it holds over $15 billion in debt.\u00a0 Devon Energy had the second highest interest expense in 2017 due to its $10+ billion in debt.\u00a0 However, Devon has recently sold assets and paid down its debt and lowered its interest expense considerably.\u00a0 Furthermore, Chesapeake is paying $425 million a year to service its $9+ billion in debt.<\/p>\n

It is quite remarkable that these 16 shale energy companies forked out $5 billion to service their debt last year.\u00a0 The debt service is an expense that impacts the company\u2019s net income profits.<\/p>\n

For example, Anadarko posted a loss of $456 million in 2017.\u00a0 However, they paid $932 million in interest expense last year.\u00a0 If Anadarko didn\u2019t have an interest expense, their $456 million loss would have been a $479 million net income profit.\u00a0<\/strong> So, these 16 companies lost $5 billion in potential profits because they have to service their skyrocketing debts.<\/p>\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Top U.S. Shale Producers Soaring Debt Service Guts Profits The massive debt accumulated by the U.S. Shale Industry is now decimating company profits.\u00a0 As company debts and interest rates rise, these shale producers interest expense also continues to increase.\u00a0 Debt service is not only cutting into company profits, but it also takes a great deal […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2,3],"tags":[195,21235,431,3329,21236,12073,7893],"class_list":["post-36668","post","type-post","status-publish","format-standard","hentry","category-economics","category-energy-2","tag-debt","tag-debt-service","tag-interest-rates","tag-profits","tag-shale-oil-producers","tag-srsrocco-report","tag-us-shale-industry"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/36668","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=36668"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/36668\/revisions"}],"predecessor-version":[{"id":36669,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/36668\/revisions\/36669"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=36668"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=36668"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=36668"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}