Insight
US Independent E&Ps are delivering on deleveraging promises
Report summary
Capital discipline and a focus on maximising free cash flow continues to drive improvements in overall financial health and resiliency for US Independent E&Ps. The pace of debt reduction accelerated in Q2 2021 with strong cash flow. Cash flow enables incremental returns of capital to shareholders as well, but deleveraging remains a top strategic priority across the sector. Gearing ratios continue to fall and the trend remains positive, but there is room for improvement as only a few companies currently possess ratios below Wood Mackenzie's suggested target. The Lower 48 Corporate Debt Monitor tracks the progress made to date and also provides additional analysis on asset coverage and leverage ratios as well as the outlook for continued improvement in overall balance sheet integrity across the peer group.
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