68 2017 bankruptcies, $33.4 billion in debt
Energy attorneys Haynes and Boone have released the firm’s updated list of oil and gas bankruptcies, detailing how the continuing downcycle has affected companies.
The list records all oil and gas industry bankruptcies in E&P, oilfield service and midstream companies since 2015. In total, Haynes and Boone lists 310 different bankruptcies, from companies large and small.
Haynes and Boone list a total of 68 bankruptcies in 2017, primarily from service companies. While most defaulting companies are small, down to tiny KMK Oil & Gas which had $10,325 in debt, there have been a few significant filings this year.
Based on total debt the second-largest bankruptcy since the downturn occurred in August, when Seadrill defaulted on over $8 billion in loans. The only larger filing was SandRidge Energy which found $8.26 billion in debt too large to handle in mid-2016.
E&P companies have adapted to the downturn, and only 20 operators have gone bankrupt in 2017, compared to 44 in 2015 and 70 in 2016. Only three large E&P companies have gone bankrupt this year, Bonanza Creek, Memorial Production Partners and Vanguard Natural Resources. All of these were in the beginning of the year, and bankruptcies have since tapered off. The 20 bankrupt companies represent about $5.6 billion in combined debt, compared to the $56.8 billion that went bankrupt in 2016.
56% of oilfield service bankruptcies have come in 2017
Margins have not improved as much for service companies, which continue to see bankruptcies. The previously-mentioned Seadrill bankruptcy is only the largest among a total of 44 filings this year, with a combined $24.8 billion in debt. This means that, in terms of bankruptcies, 2017 has actually been the worst year for service firms. All the bankruptcies in 2015 and 2016 amounted to a total of $18.8 billion, so by debt 2017 accounts for about 56% of all filings.
