Net debt has shot up by 22% or US$142 billion since 2014 for the companies in our Corporate Service coverage. Average gearing is now 36%, with the Focused US Independents the most leveraged at 60%. But oil prices above US$54/bbl are required for a return to free cash flow generation over the next three years. Organic deleveraging will be slow and unevenly distributed even if oil prices recover to above US$60/bbl. Can the sector’s balance sheet support new growth strategies?