By accepting equity in a Chapter 11 reorganization rather than cash from a forced liquidation, creditors of E&P companies during the downturn were hoping to realize a better return. They expected equity values would rise post-emergence due to an increase in commodity prices or to insightful management actions post-bankruptcy.

An assessment of 12 reorganized producers’ performance finds a mixed bag of both value creation and destruction while the price of West Texas Intermediate (WTI) has improved and natural gas has been mostly flat. These producers emerged from bankruptcy between September 2016 and August 2017. There are possible commonalities among performances, but observed correlations are relatively weak among the sample set.

Already have an account? Log In

Thanks for reading Hart Energy.

Subscribe now to get unmatched coverage of the oil and gas industry’s entire landscape.

Get Access