$45 Oil No Savior for North American Energy Firms

$45 Oil No Savior for North American Energy Firms

Three bankruptcies last week show that $45-per-barrel oil is not enough to rescue the US energy companies on the verge of collapse. Since the start of 2015, 130 North American oil and gas producers and service companies have filed for bankruptcy owing almost $44 billion, according to law firm Haynes & Boone, World Oil reported.
The tally does not include Chaparral Energy Inc., Penn Virginia Corp. and Linn Energy LLC, which filed for bankruptcy this week owing more than $11 billion combined.
At least four more oil and gas companies owing more than $8 billion are nearing default, including Breitburn Energy Partners LP and SandRidge Energy Inc. Bankruptcies have accelerated as cash-starved companies find it almost impossible to raise capital.
Energy companies have been virtually shut out of the high-yield bond markets, banks are cutting credit lines and asset sales have slowed. Several more are struggling to sustain crippling debt loads. SandRidge Energy, which owes $4.13 billion, said in its annual financial report that auditors have raised doubts about its ability to stay in business.
W&T Offshore Inc. owes almost $1.5 billion and is overdrawn on its credit line, which was cut to $150 million from $350 million in March. The company has said it will pay off the loan in three monthly installments.
"While troubled companies may not be saved by $45 oil, some of the better operators will turn profitable at $50," said Subash Chandra, an analyst with Guggenheim Securities in New York.
"If oil is at $50, fortunes turn dramatically. But the problem is they turn so much that the service companies come in and raise prices and take a share of it, or if production responds so quickly that oil has a hard time staying at $50."


Short URL : http://goo.gl/OEkGTi
  1. http://goo.gl/wZcC2A
  • http://goo.gl/MG9JSf
  • http://goo.gl/A3wSVS
  • http://goo.gl/8VdSeq
  • http://goo.gl/OYZBw7

You can also read ...

The South American nation earns 96% of its revenue through oil sales.
Venezuelan oil production crashed to a new 30-year low of 1.5...
45% of Spain Electricity From Renewable Sources
Spain’s transition to a low-carbon economy is making strong...
Norway Oil Strike Set to Escalate
Norway’s ship-owners and two oil unions said on Saturday they...
S. Korea Imports 167K bpd of Iranian Oil in June
South Korea’s imports of Iranian oil fell 40.3% in June from...
TPPHC Elaborates on Operations to Improve Power Plant Efficiency
To save natural resources in power stations and fight the...
3,600 Villages to Join National Gas Grid
The natural gas grid will cover 3,600 villages across the...
Domestic Firms Undertake Rigless Well Operations
Two Iranian oil and gas companies have jointly conducted high-...