U.S. energy sector bankruptcies reached levels during the final three months of this year last seen in the Great Recession, as the financial toll from lower commodity prices squeezed oil and natural gas producers, according to the Federal Reserve Bank of Dallas (Fed).
Sustained lower oil and natural gas prices aren't the only issue, though, economists said in a report Wednesday. Domestic exploration and production companies also have faced higher costs to produce than their international counterparts.
"At least nine U.S. oil and gas companies, accounting for more than $2 billion in debt, have filed for bankruptcy so far in the fourth quarter," said Fed economists Martin Stuermer and Navi Dhaliwal. "If bankruptcies continue at this rate, more may follow in 2016."
Upstream firms also have slashed capital expenditures, with spending estimated to be down by more than half (51%) from the fourth quarter of 2014 to the third quarter of 2015.Read more by clicking right here.
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