“Fracking companies have had to pile up more and more debt to chase ever more elusive / expensive-to-extract gas in the shale formations to try to keep up with investors’ wildly inflated expectations formed when the first high-payoff, lower cost wells (the “low hanging fruit”) were drilled. It is a Ponzi scheme, and it seems that the bottom of the pyramid is starting to take its lumps.”
Spencer Phillips, PhD
Key-Log Economics, LLC
Read more at Business Insider:
Chesapeake Energy, the second largest natural gas producer in the US, after Exxon, is the biggest exclamation mark in a special Fed-designed phenomenon: for years, QE-besotted, ZIRP-blinded, yield-hungry investors kept funding an industry that dished out nothing but hype, false hopes, and losses.