US shale companies could be forced to write down $300bn of their assets this year, starting in the second quarter, as operators begin to account for the oil-price collapse on their balance sheets, according to a new study.
The huge impairments about half the net value of the companies property, plant and equipment would increase the sectors leverage from 40 per cent to 54 per cent, triggering insolvencies and restructuring, says the study by Deloitte, an accountancy.
As Covid-19 impacts amplify pressures on shale companies through 2020, a wave of impairments may prompt the deepest consolidation the industry has ever seen over the next six to 12 months, said Duane Dickson, vice-chairman of Deloittes US oil and gas business.
The writed…
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