The total debt associated with smaller, independent U.S. shale-oil companies has more than doubled since 2007, leaving them particularly vulnerable to the plunge in oil prices, according to an article in the American Bankruptcy Institute Journal.

Authors Chuck Carroll and John Yozzo of FTI Consulting note that many of these exploration and production (E&P) companies have limited operating histories and financial resources. Much of their shale-oil development has been debt-financed “thanks to corporate credit markets’ huge risk tolerance and appetite for higher returns since 2011 in an environment of historically low interest rates.”

Total debt associated with these E&Ps now tops $285 billion, compared with $125 billion in 2007, and — more ominously — their relative leverage metrics have increased notably, the article says.

Average EBIDTA for independent E&Ps rose to 2.8x at the end of 2013 by the author’s calculations, compared with 2.2x in 2007, and Carroll and Yozzo expect this metric “will deteriorate further in 2015 as operating results weaken.”

Debt-to-capitalization ratios have also weakened and overall credit quality has “deteriorated markedly compared to a similar point in the last energy cycle.”

In aggressively financing shale-oil development, the authors say, credit markets have ignored “some fundamental and immutable realities of the energy-exploration business — namely, that these E&P companies are high-cost producers of a fungible product in a highly cyclical industry in which they are pure price-takers.”

“Financial leverage only serves to magnify these inherent business risks — a reality that has now hit home in a hard way,” the article says, citing the fierce sell-off of high-yield bonds in the energy sector since October.

Approximately 42% of rated high-yield bonds in the U.S. energy sector, or nearly $50 billion, are currently trading at market yields that are indicative of distress, according to Standard & Poor’s, compared with $2 billion just one year earlier.

Carroll and Yozzo believe a looming “tripwire” for many E&Ps is their reliance on reserve-based revolving credit facilities from bank lenders, “the mechanics of which potentially reduce a borrower’s access to capital at a most inopportune time.”

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