Bloomberg states that “[s]hale debt has almost doubled over the last four years while revenue has gained just 5.6%,” which is based on an analysis of 61 shale drillers. My guess is that they’re paying more to service that debt than they’re actually than they’re actually gaining in revenue.
Unfortunately, many shale wells do in fact lose 50-70% of their production within a year (for reference, traditional wells lose about 55% in two years). Additionally, the industry typically uses the Arps empirical decline model for determining Estimated Ultimate Recovery from an oil well. For reference, Arps created this formula in 1945, he died in 1976, and the first commercial shale well was drilled in 2004! While the formula seems to work well enough for oil production, modern shale extraction technology didn’t even exist when it was created. The formula has been tweaked for shale, of course, but it seems to generally overstate reserves.