Tag Archives: OilAndGas

Oil Company Bankruptcies Approaching Record Numbers

Several months ago, we discussed how oil companies could use Chapter 11 bankruptcy to survive. The condition, though, is that oil prices would have to rise for some of these companies to survive Chapter 11 bankruptcy. Oil prices have stayed at around $35 to $40 per barrel for more than one year, driving many companies with higher operating costs out of business. This is especially true for companies producing shale oil, which involves higher operating costs and more expensive equipment. Keep in mind, only 18 months ago, oil prices were at more than $100 a barrel, making this industry much more profitable. Many of these companies accumulated hundreds of millions or billions of dollars of debt in an attempt to rapidly expand. As we are seeing now, that tactic appears to have failed for many of these companies. Some press outlets have referred to these businesses as “zombie oil producers”,…
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