Oil and gas company bankruptcies in the U.S. and Canada surged 50% compared to last year, according to a report by Haynes and Boone law firm. The figure is likely to go higher as a decline in energy prices continue to rock producers.
U.S. and Canadian oil company bankruptcies increased to 42 in 2019, compared to 28 in 2018. Buddy Clark, partner at Haynes and Boone, said that the figures will likely continue to rise.
Between 2015 to 2019, 208 oil and gas companies have declared bankruptcy overall.
The decline in oil and natural gas production in the US has affected global market, said Buddy Clark, partner at Haynes and Boone.
A boost in shale extraction caused the US to rise as the top oil producer globally, adding to a global surplus easing the attacks on Saudi Arabia’s oil facilities in September, the killing of Iranian commander in January, and the shutdown of oil facilities in Libya.
Oilfield service companies were affected by the bankruptcies that jumped to 21 in 2019 from 12 in 2018. The largest recorded bankruptcy filing was Weatherford International with $7.4 billion.
Midstream companies that provide storage and pipelines to producers only had two bankruptcies in 2019.