Frac sand supplier Hi-Crush Inc. on July 13 filed for Chapter 11 bankruptcy protection, making it the latest oilfield service provider to succumb to bankruptcy during the COVID-19 pandemic driven downturn.

Earlier this year, U.S. shale producers slashed spending and curtailed new drilling in response to the coronavirus crisis, which has destroyed a third of global oil demand and caused a price collapse. The pullback by operators has hit the oilfield service providers hard with 11 service companies filing for bankruptcy so far this year, according to a June 30 report by Haynes and Boone LLP

“With immediate cutbacks in producers’ capex budgets for drilling, completions and other activities in the field, oilfield service companies (OFS) will feel the brunt of this impact,” Haynes and Boone lawyers wrote in the report. “Many smaller or highly leveraged OFS companies may not be able to hold on, avoiding seeking protection of the bankruptcy courts.”

Already have an account? Log In

Thanks for reading Hart Energy.

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

Free Access