Seadrill Ltd. (NYSE: SDRL) and 85 affiliated debtors filed for Chapter 11 bankruptcy protection in Houston Sept. 12 as part of a restructuring plan.The company’s voluntary petition lists total assets of nearly $21.67 million and total debt of $11.6 million, as of Dec. 31. Seadrill plans to restructure about $10 billion in debt, according to the Wall Street Journal and the Financial Times.
Source: Seadrill files Chapter 11 bankruptcy protection in Houston to restructure about $10B in debt – Houston Business Journal
Bankruptcy continued to plague the North American energy industry throughout 2016 with more than $70 billion in debt filed in the upstream sector alone.In total, there have been 232 bankruptcy filings in the U.S. and Canada that represent $96.2 billion in debt since the beginning of 2015, according to a year-end bankruptcy report from Haynes and Boone LLP. That includes exploration and production, oil field services and midstream sectors.
Source: Haynes and Boone: Texas represents bulk of energy bankruptcies since 2015 – Houston Business Journal
Another Houston company that serves the oil industry has filed for bankruptcy — this time it’s Pioneer Carriers LLC, a trucking service that hauls crude oil in the Eagle Ford and Permian Basin.Pioneer is entering Chapter 11 bankruptcy with between $1 million and $10 million in assets and the same range in debts.
Source: Pioneer Carriers LLC files for Chapter 11 – Houston Business Journal
Houston-based Bennu Oil and Gas LLC has filed for Chapter 7 bankruptcy in the Southern District of Texas in Houston.Bennu is an oil and gas offshore production company, according to archives of its now-defunct website. The company is bringing $32.5 million in assets and $724.1 million in debts into bankruptcy, according to court filings.
Source: Bennu Oil and Gas LLC files for Chapter 7 bankruptcy – Houston Business Journal
Key Energy Services Inc., an oil-well servicer, filed for chapter 11 protection on Monday after securing its creditors’ support for a debt-restructuring deal.Key said in court papers that its restructuring plan, which is subject to the approval of the U.S. Bankruptcy Court in Wilmington, Del., will cut its $1 billion in liabilities to about $250 million so it can emerge from chapter 11 with a “manageable debt load.”
Source: Key Energy Files for Chapter 11 After Striking Restructuring Deal – NASDAQ.com
Energy investors have long hoped that falling prices would solve themselves by driving producers into bankruptcy and stanching the flood of excess supply, but it hasn’t worked out that way.
Their owners may be bankrupt, but the sprawling mines of Wyoming’s Powder River Basin are still churning out coal. It is the same story in oil fields along the Gulf Coast and with shale-gas wells in the Rocky Mountains.Energy investors have long hoped that falling prices would solve themselves by driving producers into bankruptcy and stanching the flood of excess supply. It turns out that while bankruptcy filings are up, they have barely impacted fossil-fuel markets.About 70 U.S. oil and gas companies filed for bankruptcy in 2015 and 2016. They now produce the equivalent of about 1 million barrels a day, about the same as before they declared bankruptcy, according to Wood Mackenzie. That represents about 5% of U.S. oil-and-gas output.That resilience has kept energy inventories flush and prices capped. Oil shot to $50 a barrel this summer, but has had trouble making much progress beyond that mark. On Friday, oil futures in New York rose 0.4% to $50.85 a barrel.The theory that bankruptcies would help balance the market “was misguided to begin with,” says Roy Martin, a research analyst at energy consultancy Wood Mackenzie. “And people are starting to come around to that now.”This is exactly the way chapter 11 was meant to work. The process is designed to save companies that can be saved, and many energy companies are using it to lighten their heavy debt loads, adapt to lean times and keep producing.
Source: Bankruptcy Bust: How Zombie Companies Are Killing the Oil Rally – WSJ
Houston-based Key Energy Services Inc. and some subsidiaries expect to file a prepackaged Chapter 11 plan of reorganization by Nov. 8.The restructuring is expected to reduce Key’s debt by $725 million to about $250 million. The onshore, rig-based well-servicing contractor plans to begin Chapter 11 proceedings in Delaware once senior note holders and lenders officially vote on the plan and an $85 million rights offering expires.
Source: Key Energy Services plans to restructure under Chapter 11 – Houston Business Journal
Bob Michele, global chief investment officer at JPMorgan Asset Management, looks at issues in the energy industry as he sees more restructurings coming by the end of the year. Bloomberg’s Javier Blas joins the conversation on “Bloomberg ‹GO›.”
Source: Michele: Energy Restructuring Coming in High-Yield – Bloomberg
High-yield energy bonds, which have risen even as oil slid more than 20 percent in the past two months, may be hit if the commodity dips below the $40 it’s trading at now, according to Barclays Plc strategist Brad Rogoff.“That portion of the high-yield market especially, it looks a little rich with crude at $40,” a barrel, Rogoff, head of global credit strategy research at Barclays Capital, said Monday on Bloomberg TV. “If we drop below, you’ve probably got some downside there.”High-yield energy bonds are on track for their best returns since 2009, with oil recovering from a 13-year low of $26.21 a barrel in February. After rising to $51.23 in June, crude dipped back under $40 on Monday. With that drop, the correlation between speculative-grade bonds and the oil price is at its weakest level since at least 2010.
Source: Beware Junk Energy Bonds Amid Oil Slide, Barclays’s Rogoff Warns – Bloomberg
Halcon Resources Corp., the oil and gas explorer founded by wildcatter Floyd Wilson, filed for bankruptcy as part of a restructuring agreement reached with key lenders in May.
The agreement would eliminate $1.8 billion in debt and $222 million in preferred stock, the Houston-based company said at the time. On June 10, Halcon said a majority of holders had accepted the restructuring, which will be implemented through a Chapter 11 bankruptcy.
The filing Wednesday in Delaware federal bankruptcy court listed $3.12 billion in debt and $2.85 billion in assets.