Bankruptcies Slow Down For Now

Haynes and Boone has tracked 123 North American oil and gas producers that have filed for bankruptcy since the beginning of 2015. These bankruptcies, including Chapter 7, Chapter 11, Chapter 15, and Canadian cases, involve approximately $79.9 billion in cumulative secured and unsecured debt. As of April 27, 2017, nine producers have filed bankruptcy in 2017, representing approximately $5.7 billion in cumulative secured and unsecured debt.

After a two-year onslaught, bankruptcies in the oil patch have slowed dramatically, according to the new report released April 27th.

In the first four months of the year, the number of new oil and gas Chapter 11 cases have come in much lower than what it was in the same period last year, according to report by Dallas law firm Haynes & Boone.

Nine U.S. oil producers, including Houston’s Memorial Production Partners and Vanguard Natural Resources, have filed for Chapter 11 bankruptcy protection this year, compared to 29 this time last year. These cases bring the number of North American oil-company bankruptcies to 123 since 2015, involving nearly $80 billion in debt. Houston-based Adams Resources & Energy filed the most recent bankruptcy on Haynes & Boone’s list.

The slowdown in E&P bankruptcies has come as the result of higher crude prices and cost-cutting helping to strengthen balance sheets. Crude’s crash over the last two weeks has the industry on edge again.

Maybe the storm has not passed,” said Charles Beckham, a partner at Haynes & Boone. Beckham said he wouldn’t be surprised to see another wave of bankruptcies if oil prices don’t quickly recover back into the $50 a barrel range.

Haynes and Boone, LLP is one of the American Lawyer top 100 law firms, with more than 575 lawyers in 15 offices and 40 major legal practices.

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