Recovery Will Take Too Long for Some Oil Companies to Survive

Survival. It’s what oil and natural gas companies are dealing with as energy prices swirl lower and lower. The very idea that some major companies that once could afford to wait out the low prices now cannot because they accumulated too much debt in the downfall of prices. It has the attention of the New York Times which featured a story this week describing how many oil companies are low on cash “and unable to pay their debt.”

Recovery could be more than a year off for many of those companies and that’s too long for them to hold out. The Times report came as oil traded this week at $28 a barrel and the energy research firm IHS predicted as many as 150 oil and gas companies could file for bankruptcy. Others facing the same mountain of debt could be acquired or their assets sold off. The paper said one estimated suggested that as much as a third of the oil industry could be consolidated as a result of the downturn.

Read full article in New York Times.

NY Times