U.S shale oil industry might be working hard to bring the overall oil production cost down but cost curve cannot fall at the pace of current crude oil price collapse. Since June 2014 the NYMEX crude is down 60% shaving of more than USD $200 billion from shale oil companies top-line.
Not all companies can weather the fall of such magnitude specially the most levered ones. Chevron (NYSE: CVX), Exon Mobil (NYSE: XOM) with refining, retail franchise and strong balance sheet can sail through the crisis but weaker companies like Goodrich Corporation, Magnum Hunter resources and the likes are on the verge of bankruptcy with very low EBIDTA and cash flow to service the ballooning debt.
Companies must generate sufficient cash flow to pay interest on debt on time and failing to do so make them default and file for chapter 11 bankruptcy to settle with lenders. Here is the list of most vulnerable shale oil companies that are under severe stress and could file for chapter 11 if crude oil price stay low for too long: