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Bankruptcies by North American oil producers rose to the highest first-quarter level since 2016, according to a report released on Thursday by law firm Haynes and Boone, as some energy firms struggled to recover from the 2020 crash in oil prices.
There were eight bankruptcies by North American oil and gas producers in the first quarter of 2021, versus 17 in the first quarter of 2016 – the last time U.S. crude futures dipped under $30 a barrel. Prices have bounced back from year-ago lows, trading around $63 a barrel on Thursday.
The first quarter was marked by filings from relatively smaller firms, with just $1.8 billion in aggregate debt for the quarter. Last year, companies that filed for bankruptcy held $53 billion in aggregate debt, the highest total since 2016, when debt among filers totaled $56.8 billion, according to the report.
HighPoint Resources Corp was the largest debt-holder to file for the quarter, with $905 million in secured and unsecured debt.
Five oilfield service companies also filed for bankruptcy in the first quarter. Offshore driller Seadrill Ltd (SDRL.OL) accounted for most of the sector’s $7.2 billion debt, according to the report.
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