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Billionaire Wildcatter Plans Midland Oil Production Expansion

Texas, Midland-based driller Endeavor Energy Resources has applied for permits for 11 new wells, the Houston Chronicle’s Sergio Chapa reports, adding that the permit applications are for the Spraberry oil field in Midland County.

Last year, Endeavor, which is property of billionaire wildcatter Autry Stephens, was among the most active oil drillers in the region, applying for five to six drilling permits every week.

This year it all changed for most drillers, especially in the shale patch, with many going under because of the persistently week oil prices. Only a small minority of shale drillers could survive and break even at $40 per barrel, and they tend to be the most prominent players in the field, such as Exxon and Chevron.

The crisis has exposed as vulnerable anyone smaller than the supermajors after years of burning cash and amassing millions—and often billions—in debt to fund a production growth spree that eventually became one of the reasons for the price slump.

In the first six months of the year alone, as many as 20 oil and gas companies amassing more than $50 million in liabilities have filed for bankruptcy, and analysts expect more to follow. In June alone, seven oil and gas companies filed for Chapter 11, matching the record from the monthly peak in bankruptcy filings set in April 2016. The biggest victim of this crisis so far was Chesapeake Energy, which filed for Chapter 11 bankruptcy protection in late June.

In this context, news of companies planning to increase their production of oil or gas is a rarity, particularly after Reuters reported, citing analysts and industry executives, that new drilling has virtually ground to a halt. Instead, companies plan to gradually restart shut-in wells that removed about 2 million bpd in production in May.

By Irina Slav for Oilprice.com

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