Leveraged E&P, OFS Operators Looking for Stronger WTI to Elude Bankruptcy

Barring higher U.S. oil prices, about 150 more energy operators could face Chapter 11 bankruptcy filings through 2022, a new analysis by Rystad Energy indicated.

The pandemic has burdened the upstream industry, hitting debt-ridden operators particularly hard, analysts noted. West Texas Intermediate (WTI) oil has risen above $40/bbl, but exploration and production (E&P) companies and their oilfield services (OFS) brethren may have no alternative than to file for voluntary protection.

“While an improvement in oil prices toward $40/bbl WTI saved a significant number of E&Ps and prevented early Chapter 11 filings in June-July, the current price environment is in no way sufficient for a large number of E&Ps in the medium-term,” said Rystad’s Artem Abramov, head of Shale...