U.S. shale giant’s bankruptcy a warning to Canada’s oil patch – by Emma Graney and Jeffrey Jones (Globe and Mail – April 2, 2020)


A major U.S. shale producer filed for bankruptcy Wednesday, the largest casualty yet of a global oil price crash.

It is unlikely the insolvency will set off a domino effect into the closely integrated Canadian sector, but it has put the northern patch on notice to tighten operations and finances as much as possible, analysts say.

Whiting Petroleum Corp., once the largest oil producer in North Dakota’s Bakken region, has filed for bankruptcy amid the coronavirus pandemic and an oil price war between Russia and Saudi Arabia that is hammering the price of crude. The downturn has forced oil and gas producers across North America to restructure their debt.

Whiting has seen its market capitalization shrink to US$61.5-million from as much as US$15-billion at its peak in 2011, when investors were first discovering the burgeoning shale sector.

But Canadian producers have some advantages that could protect them from the same fate. Canadian banks are more hesitant to push companies into receivership than those in the United States, said Calgary-based analyst Jeremy McCrea of Raymond James.

For the rest of this article: https://www.theglobeandmail.com/business/article-whiting-petroleum-first-us-shale-giant-files-for-bankruptcy-amid/

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