The U.S. shale oil industry has been dogged by questions about profitability and overinflated production forecasts, but there is at least one spot of good news. According to Rystad Energy, the second quarter of 2019 marked the first three-month period in which U.S. shale oil developers secured positive cash flow from operations, even after accounting for capital expenditures.
The Norwegian consultancy said that 35% of the operators in the representative group of operators that it follows succeeded in balancing operational cash flow with spending. The same set of companies also reported a surplus of $110 million in cash flow from operating activities after capex, it said.
Alisa Lukash, a senior analyst at Rystad, attributed the positive cash flow to higher oil prices and reduced expenditures. “The $5 increase in the average WTI oil price from the first to the second quarter of 2019, coupled with operators’ efforts to keep spending within their initial budgets, resulted in a slight surplus of adjusted CFO for total capex,” she commented.