Remember the wave of bankruptcies that hit shale E&Ps and oilfield services providers in the shale patch between 2015 and 2017? Over those two years, more than 120 oil and gas producers filed for bankruptcy protection in the United States, figures from Haynes & Boone showed last year.
Since then, it seems that life has not been much different for many of these post-bankruptcy survivors.
Bloomberg’s Alex Nissbaum, in a recent story on the fate of those less fortunate drillers, noted SandRidge Energy as “the poster boy” for post-bankruptcy oil and gas companies that are still struggling to get back on their feet but may never succeed.
SandRidge exited bankruptcy last year but has found it difficult to return to growth mode for a number of reasons that are indicative of the challenges that remain in the U.S. shale oil and gas industry.
The most obvious one is that not all shale is created equal, whatever the industry tells us about lowering production costs and improving operational efficiencies.
Let’s forget this mantra for a moment. Everyone wants in on the Permian boom but not everybody wants in on certain parts of Oklahoma, for instance.
As one analyst told Nissbaum about the post-bankruptcy survivors, “The bottom line is a lot of these companies didn’t have very good assets to begin with. You can go through bankruptcy and wipe away debt and that’s all well and good, but the assets they ended up with are still not very attractive.”
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