Early warning signs of asset distress and impending bankruptcies

How to uncover the early warning signs of asset distress and impending bankruptcies

In the energy industry, there are a number of events that evoke a certain fear across the industry. A huge drop in commodity prices, detrimental regulatory decisions, and geopolitical events around the world are just a few that we’ve been facing in the last year. The next prevalent issue that operators and vendors are facing is widespread asset divestitures and bankruptcy due to lack of financing, inability to produce in the current price environment, or breach of contracts by vendors and partners. Often in this very social industry word of mouth is the fastest way to find out about these type of potentially devastating outcomes for our neighbors and friends. But for those that have an eye on public data, often the warning signs of asset distress or an impending bankruptcy are visible months ahead of an announcement.

Basin Intel’s Watch List product is one of those resources that keeps an eye on the trends of public information often able to anticipate the financial health of operators and vendors well before a crisis ends up as conversation fodder at local happy hours. Basin Intel uses a ratio of an operator or vendor’s total assets in a particular county to distressed public filings (primarily a variety of liens) across over 1100 counties in the U.S. to determine who might be facing some difficulty. Basin’s Watch List is a valuable resource to investors, mineral buyers, and operators alike that have the resources to pinpoint distressed assets in a particular area of interest. This perspective uncovers potential acquisitions and the opportunity to aid a distressed operator or vendor out of an unfortunate financial situation.

  1. Bill W Reply

    What percentage of your lien data is specific to mineral and working interest owners and not surface owners?

    • Lexy Mastroianni Reply

      Bill,
      That is not something that we can easily quantify because we collect ALL of the publicly recorded data. We do have an independent landman on staff that is able to create and filter our data to come up with custom reports like that. Please email or call us if you’re interested in more information.

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