#itscomplicated

Remember when you thought freshman year microeconomics 101 was NEVER going to be relevant in real life? If you are one of the risk junkies who work in the oil and gas industry you should write an apology letter to your professor for sleeping in class.

Crude prices have been on a long ride on Space Mountain primarily due to too much supply in the worldwide market. With the boom of technological efficiencies in the production of oil and gas in the last decade, (we <3 Fracking!), a downturn in prices like we’ve seen in the last 12 months is harder to accept than the passing of Prince. This supply and demand situation is causing many companies to face the dollars and cents. The “B” word (no, not that one) has become a reality for companies of all sizes since the price of crude crested in 2014. According to a recent Forbes article[1], 69 oil and gas producers have gone under and about a third of global oil and gas companies are at risk of insolvency. As participants in one of the most loved and hated industries in the world, is there any way to stay ahead of the press releases and gossip? Yes, and it lies in public data.

Companies facing bankruptcy will often divest assets or have a stream of encumbrances filed against them in tandem with the crude prices before they make anything official. There are some very clear examples of this in the data Basin Intel gathers daily. Skeptical? Samson Resources and Ultra Petroleum could have changed their Facebook status to “it’s complicated” months before they were publicly waiving the white flag. Both companies faced credit rating downgrades then a subsequent flurry of distressed filings before the big drop.

[1] Helman, Christopher. “The 15 Biggest Oil Bankruptcies (So Far).” Forbes. Forbes Magazine, n.d. Web.

Samson Resources

Ultra Petroleum

 

What about the companies that haven’t filed for bankruptcy? Their public data paints a familiar picture that investors, partners, vendors, and royalty interest owners should be keeping a close eye on.

 

Company1

Company2

So what do all of these colored squiggles mean to a savvy reader like you? Just like taking the time to read this cheeky blog if you’re willing to invest some time cyber stalking your industry neighbors you could avoid a bad first date or even a messy divorce. If you’d rather pay someone to take care of the leg work we know a guy.

 

I know something you don’t know… want to find out the identities of Company 1 and Company 2? Just fill out the form below to be redirected.



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