Summary Despite Wall Street’s love for shale, the industry has not been able to support itself through internal cash generation. If Wall Street’s love affair with shale fades, the party is over and production levels will implode. Sentiment towards shale producers relative to offshore producers is completely polarized and will likely reverse in the future. The point of this article is two-fold. I would like to comment on the poor economics of the shale oil producers, and I would also like to point out the wildly different valuations between shale oil producers and offshore oil producers, two subsectors of the same industry. On one hand, you have shale, which is quite popular and priced for perfection yet seems incapable of producing free cash flow. On the other hand, you have offshore, which is priced for failure yet has a long history of producing and returning cash to shareholders under […]