Bankruptcies climb among shale oil and gas companies
Friday, February 7, 2020
More than 200 companies in North America have filed for bankruptcy from 2015 through November 2018, and the list continues to grow, according to OilPrice.com.
Combined, the 208 companies that have gone bankrupt accumulated $121.7 billion in debt, according to a new report from law firm Haynes and Boone. Since the last update from Haynes and Boone at the end of the third quarter last year, nine more firms have gone bankrupt. Bankruptcies have already surged by 50% in 2019 when compared with 2018, hitting the highest number since 2016.
Furthermore, the rate of bankruptcies could continue to accelerate in 2019 as the price of natural gas sits below $2/MMBtu and crude oil prices have fallen back again.
Learn more: OilPrice.com > U.S. shale patch sees huge jump in bankruptcies
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Shale FAQ
How often do royalty payments come?
Depending on the company, royalty payments can arrive monthly or quarterly.
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Yes. If you plan on selling your property, notify the gas company that is leasing your land and your realtor. They will make arrangements to allow the royalty payments to transfer to a different land owner.
What are royalties?
Royalties are payments from the gas company to the landowner as part of a lease agreement. Royalties payments cannot begin until production begins. The payments are dependent upon the market price of the resource.