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A wave of bankruptcies in US oil companies


Worst fear of American companies specializing in the production of oil "shales"Twitching) Seems to be trays. Weatherford, One of the main suppliers of well drilling services, is preparing to declare bankruptcy, despite the fact that in February the production of shale in the US. A peak fracture when it exceeds 12 million barrels a day.

"Boom" producing this type of oil through a fracture of the Earth's crust would mask the continuing problems of a large number of small companies that work in the industry and it could fall into a wave of bankruptcies, the Bloomberg agency reported.

According to the newspaper, to support high production rates, they will have to drill more and more wells, which undoubtedly require huge expenses. This is why a wave of bankruptcies will soon hit US companies in the industry.

A number of assumptions indicate the development of this scenario can already be seen in the industry, says journalist Natalia Dembinskaya in her article on the Russian version of Sputnik.

A wave of bankruptcies in oil companies in the US
(Photo agencies)

Last week, Weatherford said it was preparing to declare bankruptcy. For their part, the companies Halcon Resources and Alta Mass Resources raised doubts about their ability to float. Meanwhile, California asset bonds were recognized in performing "typical so-called garbage values," according to the author, ie, 10 percentage points above the performance of US Treasury bonds.

"These companies are sunk in crisis, exposing another face of an American boom." The high costs, along with the poor balance sheets of American manufacturers, do not attract the attention of investors who tend to chase profits and not invest more resources in expanding oil extraction.

Investors are "losing appetite" for the US bomb industry

A wave of bankruptcies in oil companies in the US
Split oil companies in the US (photo agencies)

All the hopes invested in the industry were related to the rise in oil prices. Since December, the WTI and Brent markers have risen 40% to $ 60 and $ 70 per barrel, respectively.

"After seeing the prices of $ 60 or $ 70, many people assume that everything is going well, but I think they'll be richer in bankruptcy than in 2018," he said. Spencer Cutter, Analyst at Bloomberg Intelligence.

The damage caused by the crisis to the US industry reached their maximum in 2016, with 142 companies accumulating debt of $ 70,000 to $ 300 million, according to data collected by Haines and Boone.

In 2019 only the bankruptcy of Weatherford will add $ 8 billion in the combined volume of corporate debt. This will be the biggest destruction of those that have occurred in the US industry over the past four years, Bloomberg reported.

A wave of bankruptcies in oil companies in the US
Explosive oil companies in the US (photo agencies)

"Analysts note that the US shale industry he could not justify his hopes. According to Evercore ISI, energy companies' expenses have exceeded their revenues by $ 280 million over the past decade, "the Sputnik report said.

In addition, the author recalled that revenues received from the sale of a quarter of shale oil produced in the US They are used only to pay interest on the company's debt that reached at least $ 300 billion over the past decade, the Financial Times reported.

Cracking and depleting wells

For years, US companies have tried different drilling methods, geologist David Hughes noted to the oil price portal that the development of new methods has reduced costs and increased the efficiency of the wells, however, it did not help increase oil extraction. The production is only in the initial stage and ultimately depletes the resources of the better quickly.

"It is a mistake to believe that the production of oil shale can always grow thanks to the improvement of extraction technologies, and finally, geology determines the amount of resources that can be extracted from the wells," the scientist concluded.

/ JB