X

Sign Up To Our Free Newsletter

Join Now

Thanks for subscribing to our free newsletter!

ERROR

  • 3 minutes Texas forced to have rolling brown outs. Not from downed power line , but because the wind energy turbines are frozen.
  • 7 minutes Scientists Warn That Filling The Sahara With Solar Panels Is A Bad Idea
  • 11 minutes United States LNG Exports Reach Third Place
  • 15 minutes Joe Biden's Presidency
  • 4 hours America Makes Plans to Produce Needed Rare Earth Minerals Domestically
  • 1 day Texas Supply Chain Massacre
  • 7 hours U.S. Presidential Elections Status - Electoral Votes
  • 1 day Texas forced to have rolling black outs, primarily because of large declines in output from fossil fuel power plants
  • 1 day Former BP Exec "Biden not in war against oil" . . Really ?
  • 16 hours Here we go - again: plug-in hybrids cost motorists more than what they were told
  • 3 days Speaker Pelosi, "Tear Down This Wall" . . around Capital Building
  • 3 days Good Marriage And Bad Divorce: Germany's Merkel Wants Britain and EU To Divorce On Good Terms
  • 19 hours An exciting development in EV Aviation: Volocopter
The Pentagon Successfully Tests Solar Panel In Space

The Pentagon Successfully Tests Solar Panel In Space

The Pentagon has successfully tested…

Will Private Shale Firms Crush The OPEC Oil Rally?

Will Private Shale Firms Crush The OPEC Oil Rally?

The OPEC+ alliance has managed…

Another Permian Oil Producer Files For Bankruptcy 

Permian oil producer Rosehill Resources said on Monday that it had filed for bankruptcy protection, becoming the latest shale casualty of the collapse in oil prices.

Rosehill Resources has started voluntary Chapter 11 cases under the United States Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas, following a restructuring support agreement with some of its lenders announced early this month.  

After the oil price crash in March, Rosehill Resources – which has assets in the Delaware Basin in the Permian – stopped all drilling and completion activity for 2020, “in light of deteriorating global markets and commodity prices.” 

At the time, Rosehill Resources fully drew all funds available to it under a revolving credit facility, as a result of which its debt rose to US$340 million, while total cash on hand was US$73 million.  

Rosehill Resources is this week’s first bankruptcy in the U.S. oil patch and the latest victim of the crash in oil prices and oil demand in March due to the pandemic and the brief spat between Saudi Arabia and Russia which resulted in the Saudis flooding the market with oil in April, when global demand was at its weakest.

Last week, a Texas-based provider of hydraulic fracturing and cement services, BJ Services, filed for Chapter 11 bankruptcy protection due to the low oil prices and drastically reduced fracking activity in North America. 

California Resources, the largest oil driller in the state, filed for Chapter 11 bankruptcy protection two weeks ago. 

Related: New Contract Signals Serious Development Of Iraq’s Huge Nasiriyah Oil Field

Analysts and legal professionals expect more energy bankruptcies in the U.S. shale patch in the coming months even as WTI Crude prices are now more than double what they were in April.

In the last week of June alone, several companies filed for Chapter 11 protection, including fracking pioneer Chesapeake Energy, the biggest victim of the price crash so far and the most prominent example of the U.S. shale industry’s modus operandi of the past few years—borrowing to drill.

“It is reasonable to expect that a substantial number of producers will continue to seek protection from creditors in bankruptcy even if oil prices recover over the next few months. In the second quarter of 2020, 18 producers filed bankruptcy compared to only five who filed in the first quarter,” law firm Haynes and Boone said at the end of June. 

By Michael Kern for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage



Leave a comment

Leave a comment

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