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Page added on January 8, 2015
Deep Debt Keeps Oil Firms Pumping
Producers Have Increased Their Borrowings by 55% Since 2010
American oil and gas companies have gone heavily into debt during the energy boom, increasing their borrowings by 55% since 2010, to almost $200 billion. Their need to service that debt helps explain why U.S. producers plan to continue pumping oil even as crude trades for less than $50 a barrel, down 55% since last June. But signs of strain are building in the oil patch, where revenue growth hasn’t kept pace with borrowing. On Sunday, a private company that drills in Texas, WBH Energy LP, and its partners, filed for bankruptcy protection, saying a lender refused to advance more money and citing debt of between $10 million and $50 million. Neither the Austin-based company nor its lawyers responded to requests for comment. Energy analysts warn defaults could be coming. “The group is not positioned for this downturn,” said Daniel Katzenberg, an analyst at Robert W. Baird & Co
6 Comments on "Deep Debt Keeps Oil Firms Pumping"
Makati1 on Thu, 8th Jan 2015 7:53 am
“We’ll make up our net loss with volume!”
LMAO
steve on Thu, 8th Jan 2015 9:13 am
or maybe they will give those debts to the FED who will throw them in the trash and wipe them off the books; everything is being manipulated even the price of oil at this point. Soon we will see oil come back up in price and settle at about $85 a barrel….it is amazing what you can do with computers these days…
bobinget on Thu, 8th Jan 2015 9:21 am
Makati beats me to oldest wholesale in existence, joke.
Full text:
“OK, we lost a few cents on each item, but we always make it up in volume”
In oil’s case we are talking not a few cents but up to 50%.
Eventually, dawn will come and the idea of leaving
money losing oil in the ground for another, actual
profitable day .
Banks will work with this plan. After-all they can’t
recoup investments any other way.
penury on Thu, 8th Jan 2015 11:24 am
Really seems like a viable plan to me. After all our government has been doing this for over thirty years now. Of course it helps if you can bomb, shoot and destroy whomever you owe the money to,
jjhman on Thu, 8th Jan 2015 12:15 pm
You have to look with a jaundiced eye at anything from the WSJ but I’m eager to see what the current pricing tells us about the difference between the cost at which frackers will start drilling and cost at which they can afford to pump oil in an existing well. AS usual seperating the wheat from the chaff in the reporting will not be trivial.
trickydick on Thu, 8th Jan 2015 6:51 pm
We should hire some ISIS extras to blow up a rig in the Bakken. Then send them to Eagle Ford and set some wells on fire. Prices would recover at least to $60/bbl. Those guys ought to be able to get reasonable flight fares from Langley, with fuel prices so low.
Coke laid off over 1,000 white collar workers today. Gotta make up for slowing sales, they say. The recession is coming! Meanwhile, jobless claims still look fantastic. But that won’t last.