Cross border insolvencies and financial restructurings are remarkably opaque considering we live in the Information Age. The mission of the Centre of Main Interest (the COMI) is to light some candles in the darkness and create a forum for further discussion. The Law Offices of Tally M. Wiener, Esq. are pleased to publish the COMI blog.
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Sunday, March 29, 2015
Vulnerable Oil Producers Tap Restructuring Advisors To Negotiate With Lenders
By Madalina Iacob
The record drop in oil prices over the last six months has consumers – and some investors – cheering. Optimists believe that the economy is ripe for a boost as would-be shoppers earmark their extra cash to spend on anything from dining out to apparel.
While shopping sprees may prop up some economic segments, there’s a darker side to the oil price plunge. Dozens of small oil and gas exploration and production companies in US regions like the Bakken formation and Permian basin collectively took out tens of billions of dollars of debt in recent years – predicated on the assumption that $100 per barrel oil was here to stay. Those highly levered capital structures are already starting to crack, as earnings slow down and the cost to drill doesn’t justify the revenue that the oil brings in.
A handful of the high-cost, debt-saddled exploration and production companies have already hired restructuring advisors and in a few cases have pulled the trigger and filed for Chapter 11.
For more, see: http://www.forbes.com/sites/debtwire/2015/03/26/vulnerable-oil-producers-tap-restructuring-advisors-to-negotiate-with-lenders/