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Five Years After Crude’s Collapse, Shale Patch Still Struggles - Bloomberg

It has been five years since crude started a precipitous drop that eventually saw it hit a low of $26 a barrel. While prices have recovered some of the lost ground, shale producers are still feeling the pain, Bloomberg News reported. Oil’s 76 percent collapse from almost $108 a barrel in June 2014 was the worst plunge since the financial crisis of 2008. In 2014, oil and gas companies made up almost 11 percent of the S&P 500 Index. Now, that’s just over 5 percent as some investors appear to have given up on the sector. Shareholder antipathy stems at least in part from questions over the profitability of shale drilling. While the five big, publicly traded integrated major producers — BP Plc, Chevron Corp., Exxon Mobil Corp., Royal Dutch Shell Plc and Total SA — resumed generating free cash flow as a group in 2017, independent U.S. drillers only became cash-flow-positive (based on an average of 12 such companies compiled by Bloomberg) in 2018 — and they were back in the red in the first quarter of 2019.

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