One-Third of Oil Firms Facing Bankruptcy

One-Third of Oil Firms Facing Bankruptcy

Roughly a third of oil producers are at high risk of slipping into bankruptcy this year, as low commodity prices crimp their access to cash and ability to cut debt, according to a study by Deloitte, auditing and consulting firm. The report, based on a review of more than 500 publicly traded oil and natural gas exploration and production companies across the globe, highlights the deep unease permeating the energy sector as crude prices sit near their lowest levels in more than a decade, eroding margins, forcing budget cuts and laying off thousands, Reuters reported. The roughly 175 companies at risk of bankruptcy have more than $150 billion in debt, with the slipping value of secondary stock offerings and asset sales further hindering their ability to generate cash, Deloitte said in the report released on Tuesday. The Deloitte study found that oilfield service providers, which provide staffing and equipment needed to drill wells, are filing for fewer bankruptcies than producers. Of the 53 US energy companies that filed for bankruptcy last quarter, only 14 were service providers.


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