Severe Revenue DeclineA dramatic top-line collapse undermines scalability and jeopardizes commercial momentum: declining revenues reduce internal funding for exploration and development, limit ability to cover fixed costs, and make it harder to demonstrate economics to partners or offtakers over the next several quarters.
Negative Operating And Free Cash FlowPersistent negative operating and free cash flow mean the business consumes cash rather than funds itself. This creates ongoing financing dependence, raises dilution risk from equity raises or asset sales, and constrains capital available for drilling, infrastructure, and securing processing capacity.
Persistent Large Losses Eroding EquityDeep, sustained losses with a negative ROE erode shareholder equity and impair balance sheet capacity to absorb further setbacks. Over months this reduces borrowing capacity, increases cost of capital, and heightens pressure to restructure operations or seek dilutive financing to continue development.