• 4 minutes Will We Ever See 100$+ OIL?
  • 8 minutes Iran downs US drone. No military response . . Just Destroy their economy. Can Senator Kerry be tried for aiding enemy ?
  • 11 minutes Energy Outlook for Renewables. Pie in the sky or real?
  • 11 hours Shale Oil will it self destruct?
  • 8 hours Berkeley becomes first U.S. city to ban natural gas in new homes
  • 27 mins Today in Energy
  • 2 days Excellent Choice: Germany's Von der Leyen Secures Powerful EU Executive Top Job
  • 12 hours Oil Rises After Iran Says It Seized Foreign Tanker In Gulf
  • 21 hours Populist, But Good: Elizabeth Warren Takes Aim at Private-Equity Funds
  • 22 hours Mnuchin Says No Change To U.S. Dollar Policy ‘As of Now’
  • 2 days Migration From Eastern Europe Raises German Population To Record High
  • 1 day Washington Post hit piece attacking oil, Christians and Trump
  • 2 days White House insider who predicted Iran False Flag, David Goldberg found dead in his New York apartment
  • 13 hours Why Natural Gas is Natural
  • 2 days Germany exits coal: A model for Asia?
  • 9 hours LA Solar Power/Storage Contract
Oil Falls Back As Iran Risk Factor Fades

Oil Falls Back As Iran Risk Factor Fades

Oil prices started the week…

Iran's Oil Tanker Leverage Game

Iran's Oil Tanker Leverage Game

The geopolitical tug of war…

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
Download on the App Store Get it on Google Play