Yesterday, we saw Diamond of Shore Drilling provide documentation to fulfill text 11 of the Bankruptcy Protection Act, becoming the second victim of the oil market crash, after the price dropped below zero, and then the violent volatility in forward month prices, June, with fears of a repetition of what happened in the previous.
What the market fears here is: Out of global storage capacity, and this is what happened in South Korea, data indicate that US stocks will be filled by mid-May.
According to the Financial Times, the company’s debt accumulation reached $ 2.6 billion, and companies said their move was driven by an unprecedented collapse in oil prices, which made matters worse for companies suffering over the past few months.
According to Bloomberg, there are at least 7 companies in North America that are under the same threat since the beginning of the year, before the collapse of US crude oil in negative areas early last week. This urged creditors to demand repayment of their corporate debt in the market, resulting in companies selling their assets which were no longer worth anything amid the price collapse.
The company said it had tried to borrow to stave off the disaster, and to take other steps to avoid bankruptcy, but had been unsuccessful. According to Bloomberg, the company’s website is worse than other companies because of the nature of the company’s activity.
Restad Energy warned that 533 oil companies would go bankrupt if oil remained below $ 20 a barrel.
“The situation is really bad, but once the price reaches 20 or even 10 it will be my nightmare,” says research chief Restad, Artem Abramov, and mentioned this when the price was $ 30 a barrel.
And now the following companies are at risk of bankruptcy: Chesapeake Energy Corp. (NYSE: CHK), Occidental Petroleum (NYSE: OXY) and Calon Petroleum (NYSE: CPE).