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Us Shale Oil bankruptcy Army adds one more Rosehill Resources to file for bankruptcy
Jul 28,2020 08:35CST
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SMM: the army of bankruptcies in the US oil and gas industry is growing. (Rosehill Resources), a US resources company, filed for bankruptcy protection on Sunday local time, and the collapse in oil prices forced the shale oil prospector to seek debt restructuring.

Rose Mountain Resources Company mainly conducts crude oil drilling in the part of Delaware Basin on the west side of Permian basin (Permian Basin). The company has filed for bankruptcy under Chapter 11 in Federal bankruptcy Court for the Southern District of Texas.

As oil prices have rebounded over the past few years, a large number of US shale companies have been borrowing to raise money to expand production, making them vulnerable to this year's historic crude oil crash.

In March, when demand plummeted as a result of the global outbreak, the production reduction agreement between Saudi Arabia and Russia also broke down, causing oil prices to fall to their lowest level in nearly two decades as a result of the imbalance between supply and demand.

Rose Mountain Resources said it would stop all drilling and fracturing activities by 2020. In July, the company reached a restructuring agreement with some lenders.

The bankrupt army continues to expand its camp.

Rose Mountain Resources is the latest company in the US oil and gas industry to seek bankruptcy protection. (California Resources), California's largest oil drilling company, also filed for bankruptcy protection earlier this month to implement a pre-arranged restructuring plan that would erase more than $5 billion in debt and equity.

In the last week of June alone, several oil and gas companies filed for bankruptcy protection, including shale pioneer Chesapeake Energy company (Chesapeake Energy), the biggest victim to date of the collapse in oil prices.

Analysts and legal professionals expect more bankruptcies in the US shale industry in the coming months, even though the price of West Texas Intermediate has more than doubled from its April average to $40 a barrel.

It is reasonable to expect that even if oil prices rebound in the coming months, a large number of producers will continue to seek bankruptcy protection. In the second quarter of 2020, 18 manufacturers filed for bankruptcy, compared with five in the first quarter, "law firm Haynes Boone said at the end of June.

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