The Great Gas Debate, page-26

the shale producers are hedged at slightly above their break-evens in order to get finance. This is fine. This would be fine if these were conventional wells: price drops but who cares because costs are sunk and we are getting enough revenue to stay in business. But they aren't like normal wells

the BIG problem with this shale stuff is the wells die quickly and take loads of capex just to maintain. This capex is more than the revenues and the business would not be sustainable if it were not for very low interest loans.

oil price down = no more loans for now
interest rates up = costs more to service loans

sure, lots of loans are fixed interest and can survive in the short term. but the big point is that shale at these prices and/or higher interest rates is not sustainable. the even more important thing is that the market seems to think that it is and that we now have too much supply into the medium term.