Commencing in 2015, the oil and gas industry began to experience a level of distress unprecedented in recent decades. During this time of distress, as a service to our clients, our business contacts, and the industry as a whole, Haynes and Boone has provided regular updates containing data regarding oil and gas bankruptcy filings. We began this process with our wildly popular Oil Patch Bankruptcy Monitor. Fueled by popular demand, we subsequently commenced publication of our Oilfield Services Bankruptcy Tracker and our Midstream Report. As 2016 draws to a close, in response to the overwhelming feedback from our loyal readers, we now share our Special Year-End Report that includes, not only updates to our Oil Patch Bankruptcy Monitor, Oilfield Services Bankruptcy Tracker, and Midstream Report, but also new data regarding bankruptcy exit strategies successfully employed by oil and gas producers. View the Year-End Edition of the Haynes and Boone Energy… Continue Reading
Haynes and Boone has tracked 114 North American oil and gas producers that have filed for bankruptcy since the beginning of 2015. These bankruptcies, including Chapter 7, Chapter 11, Chapter 15, and Canadian cases, involve approximately $74.2 billion in cumulative secured and unsecured debt. As of December 14, 2016, 70 producers have filed bankruptcy so far this year, representing approximately $56.8 billion in cumulative secured and unsecured debt. During the month of November, 5 E&P companies filed for bankruptcy with cumulative debt of approximately $1.2 billion. So far, in the month of December, 1 E&P company filed for bankruptcy with cumulative debt of $1.4 billion. Texas bankruptcy courts remain at the top of the venue leaderboard, both in terms of the number of E&P filings and cumulative debt. Fifty one E&P bankruptcies have been filed in Texas, representing approximately $32.5 billion in cumulative secured and unsecured debt. View the Haynes and… Continue Reading
As a companion to our analysis of E&P and oil field service bankruptcy filings, Haynes and Boone has reviewed and compiled this Midstream Report. As demonstrated by the Midstream Report, the midstream sector has not suffered the same level of distress experienced by E&P or oilfield service companies. As of December 14, 2016, 16 midstream companies have filed Chapter 11 bankruptcy in the United States since 2015. These bankruptcies involved approximately $17.2 billion in cumulative secured and unsecured debt (including debt of related affiliates). View the Haynes and Boone Midstream Report here.
As a service to energy industry participants, the lawyers of the Oilfield Services and Bankruptcy Practices at Haynes and Boone, LLP have been tracking and reporting industry developments in oilfield service restructurings. Our research includes details on 110 bankruptcies filed since the beginning of 2015, including secured and unsecured debt totals for each case. The total amount of aggregate debt administered in oilfield services bankruptcy cases in 2015- 2016 is approximately $18.8 billion and the average debt of these cases exceeds $170 million. View the Haynes and Boone Oilfield Services Bankruptcy Tracker here.
While exploration and production bankruptcies have slowed, nearly two-dozen North American oilfield service companies commenced Chapter 7, Chapter 11 or Chapter 15 bankruptcy since August 1, 2016, involving over $4.8 billion in cumulative secured and unsecured debt, including Tervita Corporation ($2 billion), Key Energy Services, Inc. ($1 billion), and Basic Energy Services, Inc. ($1.1 billion). As of October 25, 2016, 70 oilfield service companies have filed bankruptcy so far this year, totaling over $13.3 billion in cumulative debt. Despite the recent spike in oil prices and increase in active drilling rigs, all indications suggest the uptick in oilfield service bankruptcies will continue in 2016 and into 2017. View the Haynes and Boone Oilfield Services Bankruptcy Tracker here.
Since April 2015, Haynes and Boone, LLP has conducted four borrowing base redetermination surveys, including one most recently in September 2016. The objective is to get a better idea of what lenders, borrowers (producers) and others are expecting regarding upcoming borrowing base redeterminations in light of the price uncertainty in the commodity market. The survey shows that respondents on average overall expect 41 percent of oil and gas borrowers to see a decrease in their borrowing base during the fall 2016 borrowing base redetermination season. For companies that will see a borrowing base decrease, survey participants expect borrowing bases to decrease an average of 20 percent. If you break out respondents by category, the Haynes and Boone survey shows that lenders are expecting a 16 percent decrease, while oil and gas companies are anticipating a 29 percent decrease. This difference may be the result of lenders attempting to decrease borrowing… Continue Reading
Haynes and Boone has tracked 105 North American oil and gas producers that have filed for bankruptcy since the beginning of 2015. These bankruptcies, including Chapter 7, Chapter 11, Chapter 15, and Canadian cases, involve approximately $67.9 billion in cumulative secured and unsecured debt. As of October 19, 2016, 61 producers have filed bankruptcy so far this year, representing approximately $50.6 billion in cumulative secured and unsecured debt. Despite the recent spike in oil prices, all indications suggest more producer bankruptcy filings will occur during 2016. The latest Oil Patch Bankruptcy Monitor is available here.
As a service to energy industry participants, the lawyers of the Oilfield Services and Bankruptcy Practices at Haynes and Boone, LLP have been tracking and reporting industry developments in oilfield service restructurings. Our research includes details on 100 bankruptcies filed since the beginning of 2015, including secured and unsecured debt totals for each case. The total amount of aggregate debt administered in oilfield services bankruptcy cases in 2015- 2016 is more than $14 billion and the average debt of these cases exceeds $144 million. The largest reported bankruptcy cases involve total debt of approximately $2.7 billion (Vantage), $2.5 billion (Paragon Offshore), $1.7 billion (Seventy Energy), $1.3 billion (Hercules Offshore) and $1.3 billion (C&J). The latest Oilfield Services Bankruptcy Tracker Report is available here. Full link: http://www.haynesboone.com/~/media/files/attorney%20publications/2016/ofstracker.ashx
Nearly every day a different E&P company makes an announcement that indicates the company is facing financial distress, insolvency or bankruptcy. Many of these companies are Operators under Joint Operating Agreements and with each announcement there are likely Non-Operators concerned about the impact these events will have on their non-operated working interests. Non-Operators should understand their JOA rights and options when their Operator becomes distressed. Article V.B.3. of the 1989 Model Form Operating Agreement provides that if an Operator “becomes insolvent, bankrupt or is placed in receivership, it shall be deemed to have resigned without any action by Non-Operators, except the selection of a successor.” If an Operator becomes insolvent, but has not yet filed for bankruptcy protection, it may be prudent for the Non-Operators to act quickly to replace the Operator. Even though the JOA provides that an Operator shall be deemed to have resigned when it files for… Continue Reading
On April 6, 2016, Quicksilver Resources Inc. filed a notice withdrawing its motion for an order authorizing and approving the rejection of gathering agreements with Crestwood Midstream Partners with prejudice, effective immediately upon Quicksilver’s receipt of payment in full of the purchase price under its asset purchase agreement with BlueStone Natural Resources. Given that Quicksilver also filed a notice of the closing of the sale of its oil and gas assets to BlueStone on April 6, Judge Silverstein is unlikely to have to address the issue of whether Quicksilver could reject its obligations to comply with covenants in its midstream gathering agreements with Crestwood. We may still see guidance on this issue out of the District of Delaware, however, as a motion to reject Magnum Hunter’s gas purchase agreement with Oneok Rockies Midstream, LLC [Docket No. 840] is currently scheduled for hearing in front of Judge Kevin Gross on April 13, 2016. Additionally, Magnum Hunter… Continue Reading