Oil bankruptcies plunged in 2021 with pandemic recovery

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The number of oil and gas bankruptcies plunged last year to its lowest level since 2018 as demand and prices for crude recovered from the pandemic-induced crash.

According to Haynes and Boone, a Dallas-based law firm that has tracked oil and gas bankruptcies since 2015, 20 oil exploration and production companies and 36 oil service and pipeline companies have filed for Chapter 11 bankruptcy. patch fell 48% from 107 filed in pandemic-hit 2020.

Haynes and Boone said they expect the wave of oil and bankruptcies that began with the 2014 oil crash will be over and they will stop publicly reporting bankruptcy filings in the oil sector. The 56 oil and gas bankruptcies filed in 2021 were the lowest in four years and well below the six-year average of 81.

“In 2021, there was ‘just’ $2.1 billion in total debt (brought to bankruptcy court by drillers and oil producers), the lowest amount since we started tracking these data – proof that the tide has turned,” Haynes and Boone said. “While there will still be bankruptcies in the oil sector, the tidal wave triggered by the price correction that began in late 2014 is over.”

BANKRUPTCY: More than 100 oil and gas companies went bankrupt in 2020

Oil and gas companies have weathered a particularly volatile energy market since 2014, when OPEC flooded the market with cheap crude to capture market share from U.S. shale producers. Since the oil crash of 2014-2016, US oil companies have faced oil crises in 2018 and most recently in 2020, when the global pandemic crushed demand and prices for crude.

Since 2015, more than 600 oil exploration and production, oil service and pipeline companies have filed for bankruptcy, bringing more than $321 billion in debt to court.

Texas has had the highest share of oil and gas bankruptcies, with 134 exploration and production companies and 164 oil service and pipeline companies filing for Chapter 11 between 2015 and 2021. Oil and gas companies in the Texas took over $196.8 billion in debt to bankruptcy court. over the past seven years.

“When we began our report in early 2015, it was clear that our industry was about to enter rough seas in the face of headwinds,” Haynes and Boone said. “We did not expect to see so many bankruptcies for so long.”

Oil and gas companies took $12.7 billion in debt to court last year, up from more than $98 billion in 2020.

Some of the biggest bankruptcy filings last year included Seadrill, which took $5.7 billion in debt to court; Basic energy services with a debt of $3.5 billion; and Highpoint Resources Corp. with a debt of 905 million dollars.

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