Shale Industry Could Become Free Cash Flow Positive

The Shale industry in the United States will be free cash flow positive for the first time by the end of 2018, according to a report by the International Energy Agency (IEA).

According to the report, higher prices combined with operational and technological improvements are the driving factors behind reaching that level. Production of shale gas is increasing, particularly in the Permian Basin restoring investor confidence in the industry. In addition, the increase in revenue allows shale companies to rely less on bank loans to fund their operations.

The IEA did caution that there were some potential roadblocks to this prediction. Pipeline constraints and a lack of available labor and materials in the Permian Basin could slow down production.