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Good News About Oil Company Bankruptcies

Discussions about the economic and financial ramifications of PEAK OIL

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Re: Good News About Oil Company Bankruptcies

Unread postby ROCKMAN » Mon 14 Aug 2017, 22:36:48

70 - Read my comments again...slowly. The majority of the US companies in the solar trade are OPPOSED to instituting trade penalties against China to protect certain US panel makers because IT WOULD INFLICT SERIOUS DAMAGE on the expansion of alt energy in our country. So once again you let your childish bias against someone involved in the petroleum industry embarrass yourself by not recognizing my support of alt energy development in the US. A matter of record documented by dozens of my post supporting such efforts. Including many bragging about the success of such projects in Texas.

Suite your self but you might try reading the Rockman's future posts with an open mind. LOL.
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Re: Good News About Oil Company Bankruptcies

Unread postby ROCKMAN » Sat 19 Aug 2017, 22:17:16

OK, despite numerous examples proving otherwise, some have questioned the ability of companies to get loans as well as credit lines from vendors after going thru bankruptcy. Here's a company that filed C11 bankruptcy a few years ago and immediately afterwards got loans and credit lines from venders. And has just filed bankruptcy again. Anyone wants to bet they'll get loans and credit when they clear Chapter 11...for the second time in just 4 years?

"Badlands Energy reported in Chapter 11 bankruptcy filings it has more than $50 million and as much as $100 million in liabilities. On the other side of its balance sheet, the company values its assets between $10 million and $50 million. Badlands...reports that its 20 largest creditors have claims totaling $30 million. It emerged from C11 restructuring in 2013.

Badlands and its subsidiaries are represented in bankruptcy court by Theodore J. Hartl and Harold G. Morris, Jr. with law firm Lindquist & Vennum. The entities filed for bankruptcy simultaneously on Aug. 11 and have asked the court to consider joint administration of the cases."
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Re: Good News About Oil Company Bankruptcies

Unread postby rockdoc123 » Sun 20 Aug 2017, 09:57:03

as is usually the case the devil is in the details regarding Badlands Energy. It was originally formed as a restructuring of Gasco Energy (the first Chapter 11). That restructuring about 95% of all outstanding shares in Gasco being transferred to two companies Markham LLC and Orogen Energy and Gasco Energy, which was a public company being converted into Badlands Energy which is a private company. In addition to taking over all the shares in the company these two companies also provided a credit facility to allow for operating capital for the company. All existing debts were solved by the two new owners. So, in essence, this isn't the same as a company going out for financing from investment banks or private funds but rather the new owners using their own capital to reorganize the company.
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Re: Good News About Oil Company Bankruptcies

Unread postby ROCKMAN » Sun 20 Aug 2017, 15:27:36

Doc - "So, in essence, this isn't the same as a company going out for financing from investment banks or private funds but rather the new owners using their own capital to reorganize the company."

It's the same operation (same wells and leases) that filed bankruptcy orighinally. It is now owned by a new set of folks that have changed the name. And yes: it does have about $60 million in outstanding loans/investments made to the restructured company known as Bandlands Energy. The largest ($42.6 MILLION) of which is a note held by the Bank of New York Mellon. The rest of its debt is owed to venders.

Straight from the filed bankruptcy petition.
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Re: Good News About Oil Company Bankruptcies

Unread postby rockdoc123 » Sun 20 Aug 2017, 16:00:46

What I was trying to say....obviously not very effectively is that their restructuring was in effect a sale. The new company that arose was now owned by two entities and it was those entities that retired all the debts of the first company and then refinanced the new company with their own money. It does not look like they went to the market for additional funds which I think would have been very difficult. The newco which was under completely new ownership and management obviously were able to hire services which ran up the debt. I think this is a bit different story than if the old company had come out with the same ownership and management and tried to hire said services
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Re: Good News About Oil Company Bankruptcies

Unread postby ROCKMAN » Sat 26 Aug 2017, 14:09:23

Latest update from the bean counters:

When oil prices bottomed out last year, it led to waves of bankruptcies, nearly half of them filed in Texas. The current recovery — a hesitant one — has slowed the courthouse filings to a trickle. Haynes and Boone’s latest Oil Patch Bankruptcy Monitor report found just two bankruptcies in April and only nine so far this year, including four in Texas. The Haynes and Boone report has tracked 123 oil and gas company bankruptcies involving $80 billion in debt since 2015.

Vincent Piazza, senior oil and gas analyst for Bloomberg Intelligence, said the decrease in bankruptcies makes sense after such hard times. After bottoming out at less than $30 per barrel, oil prices recently crossed the $50 mark before retreating. Also, Piazza said the downturn “cleared the deck” of the weakest companies. “The worst is behind the industry,” he said. “You’re coming out of the bottom with stronger, better players. They are in better shape having been hit with that blunt force trauma.”
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Re: Good News About Oil Company Bankruptcies

Unread postby shortonoil » Sat 26 Aug 2017, 16:15:18

They are cleared alright; cleared right out of money!

https://www.peakprosperity.com/blog/110 ... ng-debacle
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Re: Good News About Oil Company Bankruptcies

Unread postby ROCKMAN » Sat 26 Aug 2017, 16:33:23

shorty - "They are cleared alright; cleared right out of money!" I can only assume you've avoided my dozens of posts above that document how the vast majority of companies that cleared Chapter 11 bankruptcy came out with much less debt, more lower loan repayment schedules and significant new credit lines. Rather dishonest of you to ignore the published FACTS.
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Re: Good News About Oil Company Bankruptcies

Unread postby pstarr » Sat 26 Aug 2017, 19:47:12

ROCKMAN wrote:shorty - "They are cleared alright; cleared right out of money!" I can only assume you've avoided my dozens of posts above that document how the vast majority of companies that cleared Chapter 11 bankruptcy came out with much less debt, more lower loan repayment schedules and significant new credit lines. Rather dishonest of you to ignore the published FACTS.

Okay, so the ponzi still has a few willing suckers. Have you invested?
There's nothing deeper than love. In fairy tales, the princesses kiss the frogs, and the frogs become princes. In real life,the princesses kiss princes, and the princes turn into frogs

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Re: Good News About Oil Company Bankruptcies

Unread postby shortonoil » Sun 27 Aug 2017, 16:06:04

shorty - "They are cleared alright; cleared right out of money!" I can only assume you've avoided my dozens of posts above that document how the vast majority of companies that cleared Chapter 11 bankruptcy came out with much less debt, more lower loan repayment schedules and significant new credit lines. Rather dishonest of you to ignore the published FACTS.


What that has to do with an industry that has a bigger number on the right side of its balance sheet than it does on its left is not quit clear???? All that proves is that W.C. Fields was correct; "a sucker born every day, just enough to make a living"
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Re: Good News About Oil Company Bankruptcies

Unread postby ROCKMAN » Sun 10 Sep 2017, 15:58:26

Canniblism continues:

"Blackstone Group LP will add $10 billion in assets by buying energy investor Harvest Fund Advisors, betting that demand for pipelines and facilities will continue to rise despite sluggish energy prices. Blackstone is acquiring the Wayne, Pennsylvania-based firm for an undisclosed amount of cash and future incentive payouts, Blackstone partner Dwight Scott said in a telephone interview Thursday. Harvest’s 18-person team will remain at their headquarters and continue to be led by Eric Conklin, who will report up through Blackstone’s credit unit.

Harvest invests in U.S. midstream assets such as pipelines and export terminals through master limited partnerships. Like real estate investment trusts and business development companies, MLPs pass their federal tax duties on to individual investors, lowering overall rates. In buying Harvest, Blackstone is betting on increased need to transport, refine and ship hydrocarbons including oil and gas. The infrastructure assets, which typically have long-term contracts that kick off cash, are less at risk from fluctuating commodity prices, Scott said."
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Re: Good News About Oil Company Bankruptcies

Unread postby ROCKMAN » Sun 10 Sep 2017, 16:07:26

Shorty - "What that has to do with an industry that has a bigger number on the right side of its balance sheet than it does on its left is not quit clear???? All that proves is that W.C. Fields was correct; "a sucker born every day, just enough to make a living"

No, as Doc has explained in detail it proves that armchair generals don't know how to read a company's annual report. But, unlike Doc, I don't choose to chastise the intellectually challenged. That's just cruel. LOL.
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Re: Good News About Oil Company Bankruptcies

Unread postby coffeeguyzz » Sun 10 Sep 2017, 18:41:15

RM

Regarding the midstream purchase, there is a fascinating, non reported background story that seems to be evolving regarding hydrocarbon midstream.
To the great shock and dismay of the renewable fans, the peak in wind might be drawing close.
Many reasons for this, but the ending of tax credits along with growing opposition are two biggies.
Conversely, the massive build out from the Appalachian Basin continues with the south scheduled to receive gas within a year or two.
Big, big CCGT plants are under construction.

As an aside, regarding supply, Chesapeake has a Marcellus well flowing 55 MMcfd for over 30 days on restricted choke.
D and C cost $8 and a half million.

Appalachia Rising.
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Re: Good News About Oil Company Bankruptcies

Unread postby AdamB » Sun 10 Sep 2017, 18:45:43

shortonoil wrote:
shorty - "They are cleared alright; cleared right out of money!" I can only assume you've avoided my dozens of posts above that document how the vast majority of companies that cleared Chapter 11 bankruptcy came out with much less debt, more lower loan repayment schedules and significant new credit lines. Rather dishonest of you to ignore the published FACTS.


What that has to do with an industry that has a bigger number on the right side of its balance sheet than it does on its left is not quit clear???? All that proves is that W.C. Fields was correct; "a sucker born every day, just enough to make a living"


So this is the business model you based the etp on? It was designed ignorant on purpose, just to see how many suckers you could find?
Peak oil in 2020: And here is why: https://www.youtube.com/watch?v=2b3ttqYDwF0
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Re: Good News About Oil Company Bankruptcies

Unread postby dohboi » Sun 10 Sep 2017, 20:02:37

Perhaps relevant...and perhaps US will follow suite (but don't hold your breath!):

China, the world’s biggest car market, plans to ban the production and sale of diesel and petrol cars and vans.

http://www.bbc.com/news/business-41218243
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Re: Good News About Oil Company Bankruptcies

Unread postby Yoshua » Mon 11 Sep 2017, 05:40:04

Image

Good news? The entire oil industry is heading for bankruptcy! What exactly is good about it? Are you sure that you have thought this through?
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Re: Good News About Oil Company Bankruptcies

Unread postby shortonoil » Mon 11 Sep 2017, 07:14:00

So this is the business model you based the etp on?


Silly little troll; the Etp Model has absolutely nothing to do with a business model! Is that the only subject on which that your simplistic little brain can operate? The Etp Model is a thermodynamic model for petroleum production; no dollars and cents are used in its derivation. None are needed Dollars can't be used reliably because they do not represent a constant numerical value. Their value changes unpredictably over time. Energy units are constants, and will remain so until the end of the universe comes to pass.

Since a business model is apparently all that you can get your pointy little head wrapped around, the business model of the near future for the petroleum industry will be chapter 11 bankruptcy. They are not replacing their reserves, and can't replace them for less than about $60/ barrel, so they are going out of business. Knowing this (because they are in the oil business) they will make the first move to protect what remains of their assets, and fat management salaries. They are not going to wait around for the creditors to show up at the front door. They will operate under chapter 11 protection until what remains of their existing reserves can be turned into cash flow. With less than 5 years of developed, and producing reserves remaining they don't have long before the bond, and equity holders realize what is taking place, and remove the present management through the courts. Expect a Major to file over the next 18 months. Once one files, the cat will have jumped out of the bag, and the rest will rush to the court house. The oil age will have then officially come to its conclusion.
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Re: Good News About Oil Company Bankruptcies

Unread postby Cog » Mon 11 Sep 2017, 07:56:24

Keep pushing that doom out in time shorty? 18 months here, 10 years there. Before you know it, it will be 10 years from now and we still won't have your much desired doom. Just like when you and the other doomers predicted doom back in 2005 and 2006. Remember? I remember it all too well over at LATOC and the TOD.

I'm of the opinion now that peak oil doomers suffer from dementia. Recent events, even those just ten years past, seem to have left their brain. Its very sad.
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Re: Good News About Oil Company Bankruptcies

Unread postby rockdoc123 » Mon 11 Sep 2017, 11:31:31

They are not replacing their reserves, and can't replace them for less than about $60/ barrel, so they are going out of business.
 

Here we go again. How many times do you have to be corrected on this nonsense? Do you actually think by repeating it, again and again, it will make it true?

The 2017 E&Y study notes that from 2012 to 2016 the three year rolling average for proved reserve acquisition costs was $7.80/bbl, substantially below average oil price. F&D excluding revisions averaged $15.98/bbl over the same period. On a three-year rolling average produced reserve replacement rates for the top 50 companies based on US production excluding revisions was 158% and on a five-year average it was 190%. E&Y note that although these numbers reflect US reserves that

On a global basis, most of the integrateds in our study experienced a reserve replacement rate above 100%.


And more telling was the reserve replacement story from the independents.

Independents continued to lead the pack, with a 2016 F&D rate excluding revisions of 187%, though this was somewhat tempered from the 239% they experienced in 2015. By contrast to the integrateds, Parsley Energy and RSP Permian posted F&D rates, excluding revisions, of 720% and 608% respectively, the largest of the companies in the study; however, notably their production volumes were near 10 million barrels. Large independents improved to 134% on the same basis, up from 110% in 2015. Chesapeake Energy led this peer group with F&D excluding revisions of 486%, followed by Marathon Oil at 398% and Antero Resources at 372%


With less than 5 years of developed, and producing reserves remaining they don't have long before the bond, and equity holders realize what is taking place, and remove the present management through the courts


More horsepucky. In their year end summary, Exxon Mobil as an example stated that under current production rates they have a reserve life of 13 years.
The BP annual energy report looks at a bigger picture and what they point out is that in 2016 global R/P ratio was 50 years (R/P representing number of years of reserves left under current production rates) and for North America it was 32 years. The Middle East has a 70 year R/P and Latin America has a 120 year R/P. So once again you are full of it.
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Re: Good News About Oil Company Bankruptcies

Unread postby coffeeguyzz » Mon 11 Sep 2017, 13:40:11

Regarding bankruptcies ...

Exco Resources is currently playing out in real time how this restructuring stuff works.
Although not yet in bankruptcy, they are definitely swirling the drain.

With production in EF, Appalachian Basin, and Haynesville, it will be interesting how their assets (seemingly pretty good) get allocated in a year or so if they are unable to pull a rabbit out of their hat.

Whiting just sold off off their holdings on the Fort Berthold reservation in efforts to keep afloat.

Despite a lot of 'waiting for the end' for these operators, assets holding billions of barrels of oil, hundreds of trillions of cubic feet of gas, still have value under the right conditions.
Defining "right" seems to be an ongoing exercise.
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