• 5 hours Permian Still Holds 60-70 Billion Barrels Of Recoverable Oil
  • 10 hours Petrobras Creditors Agree To $6.22 Billion Debt Swap
  • 14 hours Cracks Emerge In OPEC-Russia Oil Output Cut Pact
  • 18 hours Iran Calls On OPEC To Sway Libya, Nigeria To Join Cut
  • 19 hours Chevron To Invest $4B In Permian Production
  • 21 hours U.S.-Backed Forces Retake Syrian Conoco Gas Plant From ISIS
  • 23 hours Iraq Says Shell May Not Quit Majnoon Oilfield
  • 3 days Nigerian Oil Output Below 1.8 Million BPD Quota
  • 4 days Colorado Landfills Contain Radioactive Substances From Oil Sector
  • 4 days Phillips 66 Partners To Buy Phillips 66 Assets In $2.4B Deal
  • 4 days Japan Court Slams Tepco With Fukushima Damages Bill
  • 4 days Oil Spills From Pipeline After Syria Army Retakes Oil Field From ISIS
  • 4 days Total Joins Chevron In Gulf Of Mexico Development
  • 4 days Goldman Chief Urges Riyadh To Get Vision 2030 Going
  • 4 days OPEC Talks End Without Recommendation On Output Cut Extension
  • 4 days Jamaican Refinery Expansion Stalls Due To Venezuela’s Financial Woes
  • 4 days India In Talks to Acquire 20 Percent Of UAE Oilfield
  • 5 days The Real Cause Of Peak Gasoline Demand
  • 5 days Hundreds Of Vertical Oil Wells Damaged By Horizontal Fracking
  • 5 days Oil Exempt In Fresh Sanctions On North Korea
  • 5 days Sudan, South Sudan Sign Deal To Boost Oil Output
  • 5 days Peruvian Villagers Shut Down 50 Oil Wells In Protest
  • 5 days Bay Area Sues Big Oil For Billions
  • 5 days Lukoil Looks To Sell Italian Refinery As Crimea Sanctions Intensify
  • 5 days Kurdistan’s Biggest Source Of Oil Funds
  • 6 days Oil Prices On Track For Largest Q3 Gain Since 2004
  • 6 days Reliance Plans To Boost Capacity Of World’s Biggest Oil Refinery
  • 6 days Saudi Aramco May Unveil Financials In Early 2018
  • 6 days Has The EIA Been Overestimating Oil Production?
  • 6 days Taiwan Cuts Off Fossil Fuels To North Korea
  • 6 days Clash In Oil-Rich South Sudan Region Kills At Least 25
  • 6 days Lebanon Passes Oil Taxation Law Ahead Of First Licensing Auction
  • 7 days India’s Oil Majors To Lift Borrowing To Cover Dividends, Capex
  • 7 days Gulf Keystone Plans Further Oil Output Increase In Kurdistan
  • 7 days Venezuela’s Crisis Deepens As Hurricane Approaches
  • 7 days Tension Rises In Oil-Rich Kurdistan
  • 7 days Petrobras To Issue $2B New Bonds, Exchange Shorter-Term Debt
  • 7 days Kuwait Faces New Oil Leak Near Ras al-Zour
  • 8 days Sonatrach Aims To Reform Algiers Energy Laws
  • 8 days Vitol Ups Cash-for-Oil Deals With Kazakhstan To $5B
Russia And Saudi Arabia Are Becoming Unlikely Allies

Russia And Saudi Arabia Are Becoming Unlikely Allies

Due to Donald Trump’s unpredictable…

Can Oil Prices Hit $60 In 2018?

Can Oil Prices Hit $60 In 2018?

As oil prices remain at…

Zainab Calcuttawala

Zainab Calcuttawala

Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on…

More Info

Oil And Gas Creditors Recover $1 Of Every $5 On Defaulted Debt

Bankruptcy court

Creditors who funded the United States’ shale boom are not in good shape to recover their invested funds, according to Moody’s Investors Service.

Banks and private lenders have only gotten back $1 of every $5 they invested in companies that declared bankrupt in 2015, the credit rating agency reports, which analyzed 15 bankrupted energy companies with at least $100 million of debt, said. Creditors usually recover three times as much from defaulting debtors.

Senior unsecured bondholders recovered just 6 cents for every dollar invested, according to World Oil.

The one-fifth figure stands slightly lower than the recovery rate reported by creditors who supported the telecom boom in the early 2000s. The number of oil companies that failed during the 2015 crisis exceeded the number of dotcom firms that busted in 2002 as well.

The crash’s effect on investors’ pockets “can only be described as catastrophic,” Moody’s said, noting that the historical average for capital recovery after default was 59 percent.

Smaller companies made up a large portion of companies that went under last year, largely due to their reduced financial flexibility related to their newcomer status. Bigger companies delayed failure by conducting debt exchanges and new second-lien issuances, the report said, noting that more than half of the oil majors who employed advanced financial maneuvers to keep themselves afloat eventually declared bankruptcy.

“I don’t expect the recoveries for the companies that went bankrupt in the first half of 2016 to be any better,” analyst Amol Joshi said in an interview with World Oil. “The worst may be behind them, but the sector still remains quite stressed.”

The total number of oil and gas bankruptcies so far in 2016 stand at twice the 2015 total, according to the report. Moody’s will continuously monitor 25 energy companies that sought court protection this year, the agency’s Senior Vice President David Keisman said.

Zainab Calcuttawala for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment
  • Kr55 on September 12 2016 said:
    The oil isn't going away. This just drives oil assets that the companies couldn't afford to extract with into the hands of ones that can, and the assets get sold for pennies on the dollar. Saudi's should be afraid of too much of this happening. The more shale and tight oil assets that get sold to strong players for next to nothing, the faster US production can ramp up when prices eventually rise.

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News