For the US shale industry, the third quarter was more of the same: new record highs in oil production, but another quarter of negative cash flow.

A sample of 38 publicly-traded oil and gas companies posted $1.26 billion in negative cash flow in the third quarter, according to a study by the Institute for Energy Economics and Financial Analysis (IEEFA). The performance was a deterioration from the previous quarter, which saw marginal positive cash flow. In fact, the results from the second quarter, while unimpressive, were actually the industry’s best showing.

But even barely breaking even didn’t last. “The third quarter’s dismal results cap a decade of disappointments for shale investors, who have waited for years for the industry to generate cash to go along with the enormous volumes of oil and gas it produces,” Clark Williams-Derry and Kathy Hipple wrote in the IEEFA report.

The outlook isn’t great as the industry faces several problems all at once. Despite proving that they can throw huge volumes of oil and gas onto the market, they have been consistently spilling red ink. After roughly a decade of this, the debt has mounted and a wave of obligations falls due in the next few years. The Wall Street Journal reported in August that while the industry had just $9 billion in debt maturing over the remainder of 2019, a whopping $137 billion matures between 2020 and 2022.

And as if such a mountain of debt wasn’t enough, struggling shale drillers have fallen out of favor with Wall Street. Without fresh capital, it’s unclear how E&Ps deal with the debt and also maintain the pace of drilling needed to offset steep decline rates endemic to shale drilling.

The slight positive cash flow reported in the second quarter may turn out to be “the financial high-water mark for the struggling sector,” the IEEFA analysts wrote.

In fact, they note that the collective $1.26 billion in negative cash flow from the 38 companies in the third quarter is actually enhanced by the positive performance from one company – EOG Resources – which reported $571 million in free cash flow for the quarter.

At the same time, a few companies posted especially dismal figures, including Diamondback Energy, Chesapeake Energy and EQT.

All three of those had their own problems. Diamondback reported a decline in oil output, with some unexpected frac hits and a gas-to-oil ratio that was a little more gassy than anticipated. Its share price tumbled on the news. Chesapeake Energy filed a “going concern” warning with the SEC, another sign that there are major problems with the fracking business model.

Meanwhile, EQT, the largest independent natural gas producer in the country, has cut staff and decided to pull back on drilling after posting yet another sizable loss. The company may see its production decline next year.

It should be noted that the third quarter earnings were particularly bad because of the slide in oil and gas prices, which is out of the control of individual companies. But much of the industry was not making money even when prices were substantially higher. “To the contrary, since the inception of the fracking boom, oil and gas companies have had to return repeatedly to debt and equity markets for infusions of capital to keep their operations running and their oil and gas flowing,” the IEEFA analysts wrote.

While precise estimates vary depending on the timeframe and the number of companies surveyed, a 2017 estimate by the Wall Street Journal found that the entire industry spent roughly $280 billion more than it generated in the prior decade. The cash burn has narrowed since then, but is still largely in negative territory.

As the years past, debt piled up but Wall Street seemed content to keep the spigots open. That is now changing, and the timing is pretty bad for the industry – oil prices are down, and a huge wave of debt soon comes due. Already there have been about 199 companies that have filed bankruptcy since 2015. Drillers are finally pulling back, but the number of chapter 11s is set to rise. 

“Until fracking companies can demonstrate that they can produce cash as well as hydrocarbons, cautious investors would be wise to view the fracking sector as a speculative enterprise with a weak outlook and an unproven business model,” Clark Williams-Derry and Kathy Hipple wrote in the IEEFA report.