The oil patch has run up the mother of all tabs. So will rising interest rates choke off the shale boom? Between 2006 and 2012, U.S. exploration and production companies clocked almost $1 trillion in capital expenditure, far above operating cash flow of $670 billion, according to Raymond James. Companies have proven adept at filling that funding gap, not least by raising debt. The E&P sector in 2007 was carrying $28.84 of net debt per barrel of oil equivalent produced, according to data from IHS , roughly equal to operating cash flow. By last year, net debt per barrel had jumped 36% to more than $39, while cash flow was essentially flat. That should provide fuel for those who doubt the shale boom’s longevity, as rising debt levels choke off returns and the capacity to invest in new wells to keep production growth going. Moreover, as the Federal Reserve […]