Bank­ruptcy rife in US oil in­dus­try

DEMM Engineering & Manufacturing - - OIL & GAS -

Thirty-seven North Amer­i­can oil and gas pro­duc­ers have filed chap­ter 11 cases in 2015, ac­cord­ing to New York Times sources, due to the col­lapse in oil prices. The pa­per says three-dozen com­pa­nies have gone into bank­ruptcy court this year—and that might not be nearly enough to bal­ance the glut­ted mar­ket.

All up nearly USD13.1bil­lion in debt is in­volved with law firm Haynes and Boone LLP say­ing in an es­pe­cially com­mis­sion re­port that in­dus­try and eco­nomic in­di­ca­tors sug­gest more pro­ducer bank­ruptcy fil­ings will oc­cur be­fore the year is out. Af­ter trad­ing at an av­er­age price of USD92.91 a bar­rel in 2014, the U.S. oil bench­mark has av­er­aged around USD50 a bar­rel this year.

Gold­man Sachs Group Inc. re­it­er­ated its view that oil prices could fall as low as USD20 a bar­rel in the com­ing months if the glut of crude and re­fined prod­ucts over­whelms stor­age ca­pac­ity.

The big­gest bank­ruptcy fil­ing by a pro­ducer this year came from KKR & Co.’s Sam­son Re­sources Corp. in Sep, with USD4.3 bil­lion of debt, ac­cord­ing to Haynes and Boone.

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