Haynes & Boone: Oil Patch Bankruptcy Monitor (October Update)

Haynes and Boone energy sector cartoon

While only three additional bankruptcies were filed in October, there have now been more than 500 bankruptcies filed in the North American oil and gas industry since 2015.

In their October monitoring report, Haynes & Boone LLP updates the number of oil producers that have filed bankruptcy since 2015 and examines the impacts and implications of the pandemic and economic fallout in 2020.

While October only saw three new bankruptcy filings, Haynes & Boone notes that more than 500 bankruptcies have been filed in the North American oil and gas industry over the last five years. The total amount of secured and unsecured debt involved in the producer cases since 2015 is over $175 billion and the total amount of investor equity in such producers that has been wiped out is many multiples of that amount.

While the pace of bankruptcy filings for producers has slowed from the wave last summer, the current borrowing base season for oil and gas borrowers may put further pressure on some of the already financially stressed producers. Haynes & Boone predicts that this environment, combined with the general lack of access to capital, makes additional filings likely before the end of 2020.

Haynes and Boone LLP is an international corporate law firm. Their lawyers have played a key role in a number of high-profile E&P, midstream, and oilfield service matters, including asset sales, refinancings, debt restructurings and Chapter 11 cases, representing debtors, creditors, energy lenders, and private equity investors.