US oil and gas companies slash spending as foreign investment dries up.

ASPO USA: “The large deficits being run by the US shale oil and gas industry are starting to be reported in the financial press. Last week the Wall Street Journal ran a story that large foreign investments in US shale oil and gas leases are drying up rapidly. In 2013, foreign companies spent only $3.4 billion on stakes in US shale formations which was less than half 2012 investments and a tenth of what they spent in 2011.”
“The reason for this decline is that while some wells may be profitable, overall drilling and producing shale oil and gas is simply not. In 2012, 80 big energy companies in the US spent a combined $50.6 billion more than they brought in from energy operations. This was twice as high as in 2011 and four times as high as 2010. For 2013, the deficit is on track to reach roughly $25 billion.
With losses like these it is no wonder that foreign investors are bailing and staying out of the US shale market. Exxon says it has lost in shirt in shale gas, Shell has written down the value of its US shale properties by $2 billion, and BHP has written down its US properties by $2.8 billion.
With foreign investment, which has been the backbone of the US shale oil and gas boom, drying up, US drillers are turning to Wall Street to finance the thousands of new wells that they need to drill and frack annually to maintain and increase production. In the past, foreign investors were less interested in whether oil wells were profitable, but were more interested in gaining access to US oil reserves and fracking technology.
US investors, however, will only be interested in whether the wells are profitable. As the “sweet spots” for drilling in US shales shrink, money for drilling new wells may shrink even faster than the availability of good places to drill.”

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