The number of North American oil and gas companies declaring bankruptcy rose sharply in 2019, according to a new report from Haynes and Boone LLP.
The Dallas-based corporate law firm, which counts energy as one of its areas of expertise, said in the report that 48 upstream operators had gone bankrupt last year, up 50% on the 2018 figure of 28. It also noted that 21 oilfield service providers filed for bankruptcy in 2019, up from 12 in the previous year.
The increase appears to stem from persistent weakness in world oil markets, Haynes and Boone said. “This increase in year-over-year filings indicates that the reverberations of the 2015 oil price crash will continue to be felt in the industry through at least the first half of 2020,” it commented.
Buddy Clark, a partner in the law firm’s energy practice in Houston, told OK Energy Today that oil and gas operators were likely to keep going bust in the short term. The number of companies heading to bankruptcy court will probably continue to rise, at least in the first half of 2020, he said.