Whiting Petroleum files for bankruptcy as coronavirus eats away at economy
Oil and gas producer Whiting Petroleum said on Wednesday it had filed for Chapter 11 bankruptcy, citing the “serious drop” in prices resulting from the price war between Saudi Arabia and China. Russia and the novel coronavirus pandemic.
Why is this important: The Wall Street Journal ratings that Whiting, a major producer in North Dakota’s prolific shale regions, is the “first major fracking company to succumb to falling oil prices.”
Whiting produced about 125,000 barrels of oil equivalent per day in 2019. It has assets in North Dakota, Montana and Colorado.
Where is it : Whiting, among companies already under financial pressure before prices crashed, announced a restructuring plan that includes giving some creditors a 97% stake in the company in exchange for debt relief of $2.2 billion.
And after: A number of oil and gas companies are under pressure as oil prices have crashed to their lowest levels in around two decades.
- There is an unprecedented drop in global demand as COVID-19 freezes huge amounts of travel and economic activity.
- “As many as 40% of U.S. oil and gas companies could spiral into bankruptcy or distress over the next two years as they grapple with a stock market crash and the coronavirus outbreak, the asset manager says Pickering Energy Partners LP”, by Bloomberg.