A Dallas law firm has completed a thorough review of the oil and natural gas industry, arriving at some astonishing results.
Earlier this month, Haynes and Boone, LLP produced its Oil Patch Bankruptcy Monitor detailing many surprising oil and gas statistics during the past year.
The law firm found that 90 North American oil companies have sought bankruptcy protection since January 2015 involving nearly $66.5 billion in cumulative secured and unsecured debt, according to the report.
So far, 48 producers have filed bankruptcy since the beginning of this month, representing approximately $49.3 billion in cumulative secured and unsecured debt.
Texas bankruptcy courts remain at the top of the venue leaderboard, both in terms of the number of E&P filings and cumulative debt. Forty-four E&P bankruptcies have been filed in Texas, representing nearly $29.5 billion in cumulative secured and unsecured debt.
Oklahoma has two E&P bankruptcy filings, representing almost $139 million in cumulative secured and unsecured debt. Osage Exploration and Development, Inc. sought bankruptcy protection in the Western District of Oklahoma on February 23. The company listed nearly $32 million in secured and over $7 million in unsecured debt. PostRock Energy Corporation sought bankruptcy protection in the Western District of Oklahoma on April 1. The company listed nearly $65 million in secured and over $34 million in unsecured debt.
Oklahoma City-based SandRidge Energy Corporation has the largest bankruptcy exposure, listing over $1.8 billion in secured and nearly $6.5 billion in unsecured debt totaling over $8 billion. SandRidge sought bankruptcy protection on May 16 in the Southern District of Texas.
The report attributes the spike in bankruptcies was driven by historically low oil and natural gas prices. The average price of a barrel of oil in July of 2016 was $41.60, less than half the price of oil during the summer of 2014. Based on recent oil prices falling below $40 a barrel, all indications suggest more bankruptcy filings will occur during 2016, according to the report.
Oil companies have discharged approximately $66.5 billion in aggregate debt in dozens of bankruptcy cases.