Eroding Equity And High LeverageA sharp decline in equity and a very low equity ratio signal materially higher leverage, reducing financial flexibility. Elevated leverage raises refinancing and covenant risk, increases cost of capital, and constrains the company's ability to pursue acquisitions or fund developments without dilutive financing.
Negative Free Cash Flow And Weakening Operating CashSustained negative free cash flow driven by higher capex and falling operating cash erodes liquidity and forces reliance on external funding. Over months, this can compel asset sales, defer maintenance, or trigger dilutive equity or expensive debt financing, threatening production sustainability and growth plans.
Revenue Decline And Margin CompressionMaterial revenue decline and steep gross‑margin erosion indicate weakening field economics or rising operating/processing costs. Persisting margin pressure reduces reinvestment capacity, heightens sensitivity to commodity price swings, and undermines long‑term competitiveness and ability to restore profitability.