Bankruptcies

Houston-based Hi-Crush Inc., one of the leading Lower 48 northern white sand providers, is seeking voluntary bankruptcy protection under Chapter 11 to reduce its debt. The operator filed for protection on Sunday in U.S. Bankruptcy Court for the Southern District of Texas, noting it has a prearranged restructuring support agreement with creditors. The agreement, if…

Natural gas prices continue to languish and oil prices have failed to strengthen despite recent geopolitical events, indicating more North American energy operators may face restructuring or bankruptcy through the first half of 2020, according to Haynes and Boone LLP.

Natural gas prices continue to languish and oil prices have failed to strengthen despite recent geopolitical events, indicating more North American energy operators may face restructuring or bankruptcy through the first half of 2020, according to Haynes and Boone LLP.

Financial adversity has continued to dog Lower 48 operators this year, with more voluntary restructurings, but the bankruptcies aren’t a harbinger of doom, according to Rystad Energy research.

The wave of bankruptcies that swept across the U.S. oil and gas industry in 2015 and 2016 has ebbed, but the recent slump in commodity prices points to caution signs ahead, according to Haynes and Boone LLP.

The oil and natural gas bust beginning in 2015 was worse than many thought, fueling a spike in the U.S. default rate that rivaled the telecom industry collapse in the early 2000s, both in recorded bankruptcies and low creditor recoveries, Moody’s Investor Service said.

U.S. energy sector bankruptcies reached levels during the final three months of this year last seen in the Great Recession, as the financial toll from lower commodity prices squeezed oil and natural gas producers, according to the Federal Reserve Bank of Dallas (Fed).

All the signs in the energy merchant sector point to “falling business plans” for a couple of companies, “if not bankruptcy,” said Standard & Poor’s credit analyst Peter Rigby in a report on the future prospects for traders. “Few doubt that one or more energy merchant companies may soon file for bankruptcy. Signals are appearing and getting stronger.”

All the signs in the energy merchant sector point to “falling business plans” for a couple of companies, “if not bankruptcy,” said Standard & Poor’s credit analyst Peter Rigby in a report last week on the future prospects for traders. “Few doubt that one or more energy merchant companies may soon file for bankruptcy. Signals are appearing and getting stronger.”