By Rupert Hargreaves 

The number of oil patch bankruptcies continues to rise, and the number of companies filing for creditor protection is accelerating, that’s according to according to law firm Haynes and Boone LP’s May Oil Patch Bankruptcy Monitor.

ValueWalk has followed the trends in Haynes and Boone’s Oil Patch Bankruptcy Monitor closely since its inception last year.

Up until April of this year, the number of oil patch bankruptcies was growing steadily but seemed to be manageable. Indeed, between last November and March this year, 15 firms collapsed owing a total of $4.4 billion in both secured and unsecured debt.

• Oil Patch Bankruptcies Total $13.1 Billion So Far This Year [Update 1]
• Oil Patch Bankruptcies Hit $17.4 Billion [Update 2]

However, after a relatively subdued start to the year, April turned into a blood bath for struggling oil companies and their creditors as 18 North American oil and gas producers filed for Chapter 11 listing $14.9 billion in debt, more than any other month covered by the report so far. A significant portion of the April cases were filed in the Southern District of Texas, which experienced a wave of filings: six filings totaling $9.3 billion of debt. This surge of activity takes the number of North American oil and gas producers that have filed for bankruptcy since the beginning of 2015 to 69. These bankruptcies, including Chapter 7, Chapter 11, Chapter 15, and Canadian cases, involve approximately $34.3 billion in cumulative secured and unsecured debt.

And according to Reuters, after the April surge, the number of North American energy bankruptcies is closing in on the staggering 68 filings seen during the depths of the telecom bust of 2002 and 2003.

Oil patch bankruptcies: Largest failures 

The largest failures this year are Energy XXI Ltd (EXXI) ($2.9 billion in total debt), Ultra Petroleum Corp.(UPL), ($3.9 billion in total debt), Pacific Exploration & Production Corp.(PEGFF), ($5.3 billion in total debt) and Midstates Petroleum Company, Inc. ($2.1 billion in total debt) all of these occurred in April.

North American oilfield services bankruptcies

Haynes and Boone also tracks North American Oilfield Services Bankruptcies, and based on the trend to the end of March; it looks as if the oil service industry is suffering much more than the E&P business.

The total amount of aggregate debt administered in oilfield services cases in 2015 to 2016 is almost $8 billion; the average debt of these cases is more than $156 million.

The largest reported bankruptcy case involves total debt of more than $2.5 billion (Vantage) and the second largest just below $2.5 billion (Paragon Offshore).