After a recovery from the last oil bust, energy bankruptcies are back on the rise in 2019.
The Houston Chronicle reports the number of oil and gas bankruptcy filings through mid-August has nearly equaled the total tally from 2018, and the aggregate debt from 2019 bankruptcy filings of almost $20 billion has already surpassed the roughly $17 billion from a year ago, according to the energy bankruptcy monitor maintained by the Houston law firm Haynes and Boone.
The biggest filings this year includes the oilfield services giant Weatherford International and a slew of oil and gas producers such as Houston’s Sanchez Energy, Halcón Resources, Vanguard Natural Resources and Midland-based Legacy Reserves.
The energy sector is currently dealing with subdued oil and gas prices, slowing drilling activity, a wave of layoffs from companies like Halliburton, National Oilwell Varco and Pioneer Natural Resources, and a displeased Wall Street cutting off the access to capital for most companies.
However, oil and gas production volumes from both Texas and the nation as a whole are at record highs and still rising.
The last oil bust saw crude prices plunge from more than $100 a barrel in 2014 down to a low of $26 in early 2016. Bankruptcy filings began to skyrocket in 2015, peaking in 2016 and then slowing down afterwards. But now they’re back on the rise again.
The energy industry has counted about 400 total bankruptcies dating back to the last oil bust in 2015, and more than half of them were Texas-based companies.
This year has seen nearly 40 energy bankruptcies thus far with more on the way in the weeks and months to come.