Approach Resources

Approach Resources' November 2019 bankruptcy exemplified the shale oil bust that killed dozens of E&P companies. The Permian Basin operator had drilled aggressively when oil prices were high, financing growth with debt. When oil prices collapsed, Approach couldn't service debt from reduced cash flows. The company liquidated, its acreage sold to better-capitalized competitors. Approach demonstrated that in commodity industries, the marginal producer dies first when prices fall - survival requires being lower on the cost curve.