High Yield Energy: Fracking Credit – JPM High Yield Energy Weekly

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High Yield Energy: Fracking Credit – JPM High Yield Energy Weekly

J P M O R G A N North America Credit Research

17 July 2026

High Yield Energy

Fracking Credit – JPM High Yield Energy Weekly

Tarek Hamid AC

(1-212) 834-5468

tarek.x.hamid@jpmorgan.com

Aaron Rosenthal, CFA

Welcome to this week’s issue of Fracking Credit. Our J.P. Morgan HY Energy index (1-212) 270-4584

aaron.rosenthal@jpmorgan.com

has returned 464bps year to date, as compared to the total return of 228bps for the

Nevin Mathewbroader J.P. Morgan HY Index. Over the last week, Energy has returned 32bps vs

(1-212) 834-5714

16bps for the broader HY Index. nevin.mathew@jpmchase.com

Key News This Week: Elle Boyd

(1-212) 270-7283

• We recently published our Natural Gas and Oily E&P model books. The natural elle.boyd@jpmchase.com

gas market was fairly muted during 2Q26 with FY26 strip pricing trending J.P. Morgan Securities LLC

lower during the quarter. The natural gas E&Ps are reasonably well positioned

for the current environment despite FY26 strip pricing declining to just $3.07/

mmbtu now. The Appalachian advantage remains very real with free cash flow Chart of the Week: Global Crude Demand

breakevens well below $3/mmbtu given the benefit of elevated liquids cuts. Forecasts

Balance sheets are generally well positioned with leverage across the subsector

near cycle-lows. Furthermore, the gas producers have been diligent in

maintaining robust hedgebooks, both for 2026 and 2027, which should sustain

free cash flow for most of the cohort. Meanwhile, the end of the ceasefire in Iran

has driven a rally in crude prices with front-month prices rallying $10/bbl to

$79/bbl and FY27 strip pricing rising $5/bbl to $71/bbl. We wrote and spoke

about a scenario similar to this in our midyear outlook two weeks ago—with