As WTI crude prices continue to hover in the mid-$40s, the debt burden of U.S. shale producers becomes more and more troubling for shareholders. While some of the top producers have solid hedge positions for the time being, the reality is that unless oil prices begin to rise sometime soon, a large number of shale producers will be forced to drastically dial back production.

Suffocating Debt

Incredibly, more than half of the 60 U.S. shale producers in the Bloomberg index currently have debt levels in excess of 40 percent of their enterprise values.

For now, many of these high-debt names continue to be top producers of crude oil. Whiting Petroleum Corp WLL 2.41%, Chesapeake Energy Corp CHK 4.24%, California Resources Corp CRC 1.55%, Encana Corp ECA 0.69% and Denbury Resources Inc DNR 1.38% all still produce more than 60,000 bbls/d each, despite their debt burdens.

Export Relief

Oil bulls may have rare reason for optimism in coming weeks, as there has been…

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