If you thought 2019 seemed much like 2016 in terms of tough times in the oil patch, leading to bankruptcy filings, you’re dead on.
Law firm Haynes and Boone has released its fourth-quarter and full-year roundup of North American bankruptcies for 2019, and the numbers are telling.
Broken into exploration and production, oilfield services (OFS) and midstream companies, the data shows sharp increases in both E&P and OFS firms, Kallanish Energy reports.
Specifically, 42 E&P companies filed for protection from creditors last year, up 50% from the 28 companies that filed in 2018. The debt carried by those 42 filers totaled $25.7 billion, up from $13.2 billion in 2018.
The largest E&P bankruptcy filing in 2019 based on total debt involved was EP Energy Corp., with more than $7.3 billion in debt.
The year-over-year percentage increase by bankruptcy filers is even larger for oilfield services firms. Haynes and Boone’s data from 2018 to 2019, jumped a whopping 75%, to 21 from 12.
2019’s five largest E&P bankruptcies based on debt
|EP Energy Corp.||$7.3 billion|
|Approach Resources Inc.||$3.7 billion|
|Legacy Reserves Inc.||$2.6 billion|
|Sanchez Energy Corp.||$2.3 billion|
|Halcon Resources Corp.||$1.7 billion|
(Source: Haynes and Boone LLP)
The value of secured and unsecured debt carried by those companies jumped to $8.07 billion in 2019, from $3.89 billion in 2018.
The largest OFS filing in 2019 in terms of debt involved by far was Weatherford International, with debt totaling more than $7.4 billion.
Three years earlier, in 2016, oil and gas took the biggest gut punch in recent years, according to the Haynes and Boone data.
A whopping 70 E&P companies filed for bankruptcy in 2016, representing $56.8 billion. That huge number was surpassed by the number of oilfield services firms that filed for bankruptcy in 2016: 72 firms, representing $13.5 billion in secured and unsecured debt.
The midstream sector was “spared” from the huge number of bankruptcies in the E&P and OFS sectors. Two midstreamers filed for bankruptcy in 2019, down from three one year earlier. In 2016, 13 midstreamers sought protection from creditors.
From 2015 through 2019, 208 E&P companies have filed for bankruptcy representing $121.7 billion in debt. A total of 196 oilfield services firms filed for bankruptcy from 2015 to 2019, representing $66.0 billion. And 28 midstream companies representing $21.6 billion likewise filed during the five-year period.
This post appeared first on Kallanish Energy News.