Whiting Petroleum files for bankruptcy as coronavirus takes a bite out of the economy
- Ben Geman, author of Axios Generate
A drill of Whiting Petroleum. Photo: AFP / Stringer/Getty Images
The oil-and-gas producer Whiting Petroleum said Wednesday that it filed for Chapter 11 bankruptcy protection, citing the "severe downturn" in prices stemming from the Saudi-Russia price war and the novel coronavirus pandemic.
Why it matters: The Wall Street Journal notes that Whiting, a substantial producer in North Dakota's prolific shale regions, is the "first sizable fracking company to succumb to the crash in oil prices."
Whiting produced roughly 125,000 barrels of oil-equivalent per day in 2019. It has assets in North Dakota, Montana and Colorado.
Where it stands: Whiting, among the companies already under financial strain before the price collapse, announced a proposed restructuring that includes giving certain creditors a 97% stake in the company in exchange for relief on $2.2 billion in debt.
What's next: A number of oil-and-gas companies are under strain as oil prices have collapsed to their lowest levels in roughly two decades.
- There's an unprecedented drop in global demand as COVID-19 freezes huge amounts of travel and economic activity.
- "As many as 40% of U.S. oil and gas companies could crater into bankruptcy or distress over the next two years as they grapple with a market crash and the coronavirus outbreak, according to asset manager Pickering Energy Partners LP," per Bloomberg.