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Under the updated SEC rules, which went into effect in 2009, drillers can count oil and gas from wells that won’t be drilled or fracked for up to five years as part of their proved reserves. Those as-yet-untapped wells can be put on a company’s books as a subset of their “proved” reserves, listed under the label “proved undeveloped” reserves.
Halcón is an excellent example of the Ponzi scheme that is the fracked oil story in America. Big promises that lead to huge loans that lead to more promises. And while the investors get burned and $280 billion gets squandered, the fracking CEOs walk away very rich along with the deal makers on Wall Street.
The U.S. shale oil industry hailed as a “revolution” has burned through a quarter trillion dollars more than it has brought in over the last decade. It has been a money-losing endeavor of epic proportions.
As a whole, the American fracking experiment has been a financial disaster for many of its investors, who have been plagued by the industry’s heavy borrowing, low returns, and bankruptcies, and the path to becoming profitable is lined with significant potential hurdles.
The aim of this article is to show that the shale industry, whether extracting oil or gas, has never been financially sustainable.
In the first half of 2014 the volume of debt issued by the global petroleum industry was equivalent to the GDP of Austria.
