First US oil shale bankruptcy filing seen as herald for a string of others as the oil crisis bites
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Combustion Industry News Editor
The first in what is expected to be a string of bankruptcies in the US shale oil sector has occurred, as the bite of ultra-low oil prices (in the range of US$20-26/barrel) hits. Denver-based independent producer Whiting Petroleum, said to have been in trouble for some time, has filed for bankruptcy protection after exploring its restructuring options over the last month, as the Financial Times has reported. Other companies are expected to follow suit, with a number of them, such as Chesapeake Energy, California Resources and Gulfport Energy having recently hired advisors to help them reduce debt. Analyst Kevin Baer of CKC Capital told the FT that the “big takeaway is how far-reaching the damage can be from everything that is going on. It can be a very quick fall from grace for companies that have a lot of leverage. Whiting is the poster child for how this is playing out.” Bradley Holly, Whiting’s chief executive, has said that the company’s bankruptcy protection filing will eventually allow it to compete “in the current environment”, though how it will do that is unclear.