70 OIL COMPANIES OF THE USA ARE ON THE VERGE OF BANKRUPTCY

2020 has become a challenging year for the oil producers. After the March events (the conflict of the oil producers, the beginning of the coronavirus pandemic), called the "black swan" effect, it became clear that a significant number of companies would not be able to avoid bankruptcies.

Following the bankruptcy of the offshore oil producer Arena Energy last week, the total number of applications has reached 36. 31 of them were filed in the second and third quarters of this year. The experts in the United States note that the total debt of the oil and gas industry for 2020 is $ 53 billion.

Analysts predict that around 60-70 oil and gas producers may file for bankruptcy by the end of this year.

Even at a price of $ 50 per barrel, as it had been for almost all the 2019, a number of oil companies were barely reaching the level of profitability. In a situation where the prices fell by 20%, it became almost impossible to work.

The experts point out that one of the most discussed topics in the industry is the number of rigs and the decline in the production rates. According to a survey of the US energy sector, conducted by the Federal Reserve Board, about 82% of the respondents cut production or completely stopped it in the second quarter of this year.

Most of them do not expect very significant costs in order to restore the operation of the oil wells. This greatly distinguishes the current situation from the crisis that took place in the oil production market four years ago.

The experts in the North American oil and gas market note that this is not the first time many producers have experienced the companies’ restructuring in the recent years.

An example of such a company is Chaparral, the bankruptcy of which was previously mentioned by Rusbankrot. The company announced that it would fully repay all the unsecured debt (about $ 300 million). As a result, a restructuring may take place, in which the holders of unsecured securities will be able to return only 39% of the total amount of claims, amounting to $ 2.6 billion. But at the same time, they will become the owners of a 97% stake in the capital of the renewed company, which is about to go through the bankruptcy.