Wall Street Loses Faith In Shale

Remember the dot.com bubble around 2000? You should as it showed a dynamic that’s at play in shale now. It stared with idealists who wanted to get something new to work, then the market picked it up and threw cash at everything that just smelled like a dot.com. The craziest, most ridiculous business concepts got millions based on a PowerPoint presentation. The feeding frenzy was in full swing when suddenly bang, it all collapsed in a pile of rubble. Many died, some survived, consolidated, remade themselves, kicked the game up a notch or more and went through the pain in order to become true giants. Amazon was one of them. They almost died at the time. Look at them now. Do you feel that they are close to dying? Shale must start to clean up its act. It will not do so willingly – it will do so when faced with oblivion. Many will wink out of existence but those that survive will put the game onto a totally different level. The Amazon of shale (and of oil&gas) is already out there, biting fingernails and fighting like hell. In 15 years it will have eclipsed companies like Shell and Exxon.

To Wall Street, the shale industry has lost a lot of its allure. A decade’s worth of promises have failed to materialize, and Big Finance is cutting some of its ties with smaller shale drillers who have not delivered.

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