Energy ‘death list’ proves prescient

Houston-based Warren Resources filed for Ch. 11 protection in June, adding to the more than 150 North American energy bankruptcies in the last 18 months since the oil crash began.

Warren also represented another target on a so-called “oil company death list” published in early 2015 by the Baltimore-based Oxford Club investors’ network. Out of the list of 19 companies with allegedly “toxic” debt-to-equity ratios, eight have since filed for bankruptcy, one was bought at a bargain and a few others are teetering on the brink.

All but one of those that filed for Ch. 11 have Houston headquarters — Warren, Energy XXI Ltd., Goodrich Petroleum Corp., Halcón Resources Corp., Hercules Offshore, Linn Energy and Vantage Drilling. The only other, Magnum Hunter Resources Corp., moved from Houston to Irving just before filing.

Magnum recently emerged from bankruptcy, as did Hercules, which promptly filed for Ch. 11 a second time.

One of the listed companies, LRR Energy, was bought by Houston’s Vanguard Natural Resources, which also appeared on the list. As of mid-day Friday, was trading dangerously low at less than $1.40 per share on the Nasdaq exchange.

Other companies on the list trading near $1 per share include Pennsylvania-based Rex Energy, Midland-based Legacy Reserves and Dallas-based EXCO Resources. Houston-based EV Energy Partners, which is controlled by EnerVest, is a little more than $2 a unit. Another, Houston-based Exterran Partners, was converted into Archrock Partners.

Out of the remaining four from the list, three are surviving — Houston’s Sanchez Energy Corp., The Woodlands-based Tetra Technologies Inc. and Denver-based Antero Resources Corp. — while only one of the 19 is arguably thriving, Midland’s Parsley Energy.

The days of $100 a barrel oil ended after mid-2014 and prices plummeted down to nearly $25 per barrel in February, before rebounding to more than $45 today.

Through June, Haynes and Boone has tracked 157 North American energy companies that have filed for bankruptcy since the beginning of 2015. And more than half of them, 82 to be exact, are based in Texas.

Apart from the “death list” companies already mentioned, some of the biggest bankruptcies include Sandridge Energy, Ultra Petroleum, Breitburn Energy Partners, Samson Resources Corp., Sabine Oil & Gas, Paragon Offshore, Quicksilver Resources, Swift Energy, Midstates Petroleum, Seventy Seven Energy and Berry Petroleum.

There are several others still trading for less than a dollar on the stock exchanges, such as Houston-based C&J Energy Services and Frisco-based Comstock Resources.