• 3 days Nuclear Bomb = Nuclear War: Saudi Arabia Will Develop Nuclear Bomb If Iran Does
  • 2 days Statoil Changes Name
  • 3 days Tillerson just sacked ... how will market react?
  • 2 days Russian hackers targeted American energy grid
  • 1 day Is $71 As Good As It Gets For Oil Bulls This Year?
  • 3 days Petrobras Narrows 2017 Loss, Net Debt Falls Below $85bn
  • 3 days Proton battery-alternative for lithium?
  • 2 days Ford Recalls 1.38 Million Vehicles (North America) For Loose Steering Wheel Bolt
  • 1 day Oil Boom Will Help Ghana To Be One Of The Fastest Growing¨Economies By 2018!
  • 2 days Country With Biggest Oil Reserves Biggest Threat to World Economy
  • 2 days I vote for Exxon
  • 2 days HAPPY RIG COUNT DAY!!
  • 3 days UK vs. Russia - Britain Expels 23 Russian Diplomats Over Chemical Attack On Ex-Spy.
  • 3 days Why is gold soooo boring?
  • 3 days South Korea Would Suspend Five Coal - Fire Power Plants.
  • 1 day Spotify to file $1 billion IPO
Energy Sector Under Threat From Deadly Cyberattacks

Energy Sector Under Threat From Deadly Cyberattacks

Investigators are warning that hackers…

Energy Sector Defaults Hit 78 Since January

Oilfield services

Some 78 energy and natural resources firms globally have defaulted so far this year, according to S&P, accounting for 53 percent of all bankruptcies worldwide in the period. At 146, the total number is the highest since 2009.

Furthermore, said the head of S&P’s global fixed income research, Diane Vazza, as of end-September, the rate of speculative-grade defaults in these sectors jumped to almost 19 percent, the highest since May this year.

The figures call into question exactly how positive higher oil prices have been for the industry. Granted, the price rally has been shaky, but it has been welcomed by the industry as a lifeline, which it has been, in a sense. The February trough of US$27 a barrel is in the past, but the continuing volatility and the rate of defaults suggest that the new price normal is difficult for many energy firms to handle.

Reinforcing this idea, S&P said in its report that the majority of the 146 default issuers were based in the U.S., accounting for two-thirds of the total. The portion of European companies in the mix was 12, and another 11 were from Australia, Canada, and Japan. The rest of the default issuers were in emerging economies.

The S&P report chimes in with an earlier report from Debtwire, which said in September that at least 135 E&Ps in the U.S. were at a high risk of defaulting, some of them with debt loads of over a billion dollars.

The total debt of U.S. and Canadian energy companies at end-2015 was calculated by Alix Partners at $353 billion. Things haven’t improved much since then, despite the price rebound and the increase in drilling rigs, which are taken by many as a cause for optimism, despite the fact that virtually every added rig weighs further on oil futures prices.

By Irina Slav 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