WASHINGTON - Oil bankruptcies have jumped over the past two months, after the coronavirus drove down energy demand and crashed oil prices.
In April and May 14 oil and gas companies filed for bankruptcy - compared to five over the first three months of the year - according to a report by the law firm Haynes Boone.
While prices have risen in recent weeks - West Texas Intermediate was trading at $39 a barrel Friday morning - those prices are not enough to keep many oil companies solvent.
Oil prices in the $30 range are, "not a sufficient clearing price for many heavily leveraged shale producers," the report read. "It is reasonable to expect that a substantial number of producers will continue to seek protection from creditors in bankruptcy even if oil prices recover over the next
few months."
Among the 14 companies that have filed over the past two months are Houston-based firms Diamond Offshore, Yuma Energy, Victerra Energy, Freedom Oil and Gas and Gavilan Resources.
In all ten companies have filed in Texas federal courts since April, more than any other state in the country.
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June 05, 2020 at 09:51PM
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