Stephen Schork, the author of The Schork Report appeared on Bloomberg to talk about the situation for smaller shale oil producers, which he described as “absolutely dire”.
Apr.27 — “U.S. oil won’t survive this,” (sic) says Stephen Schork, founder and editor at The Schork Report, as he examines the impact of sliding oil prices on the shale industry. He speaks on “Bloomberg Surveillance.”
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Schork told how landlocked producers who don’t have enough pipeline capacity nor storage were “dying” and “trading negative, and will continue to trade negative for the foreseeable future.”
Will we see a stream of bankruptcies?
“It’s hard to imagine how we don’t see an acceleration of bankruptcies” Schork said “there is already a considerable amount of debt [in the sector]”.
He said there would be far fewer smaller producers in future, and that those which had a good acreage would be acquired by the bigger producers, in what he described as a “twilight” industry.
“US oil will survive this, [but] it’s just going to be very ugly over the next few years.”