On Wednesday, the 1st of April, 2020, Denver, Colorado-based petroleum exploration company, Whiting Petroleum Co., which had reported an annual revenue of $1.572 billion last year, nearly a quarter percentage point down from $2.081 billion a year earlier, said in a statement that the US Shale major had filed for a Chapter 11 bankruptcy protection, remarking the first major casualties of a free fall of the crude oil futures’ prices following an unravelling of a three-year-long OPEC+ pact that eventually had led to a crude oil price war for market share and tumbled the crude prices to a multi-year low.
In point of fact, Whiting’s fall from the paradise came forth at a time while the crude oil industry had been scuffling to grapple with a double whammy of a sharp decline in crude oil demands over escalating frets of a global-scale recession alongside a crude oil price war between Saudi Arabia and Russia.
Apart from that, earlier last week a US petroleum trade body had cautioned that nearly 50 per cent of US Shale producers would be bankrupted over the coming weeks even with large bailout packages, which in effect could remark a temporary termination of US onshore crude production that resumed operations back in the 2015s following lifting of a ban by the Obama administration.
In tandem, over the narratives of such tempestuous outlook in the crude oil industry, US producers appeared to have join the price war with a record output of 13 million barrels of oil per day last week, eventually leading the debt-strapped US Shales vulnerable to bankruptcies.
On top of that, casting further pessimism over the former largest oil producer in the North Dakota, Whiting’s latest decision to file for bankruptcy protection, a SunTrust Robinson Humphrey analyst Neal Dingmann said following the announcement on Wednesday (March 1st), “…filing for bankruptcy was more of a temporary solution than a long-term sustainable plan.
We believe this financial demise was due to a combination of difficult macro conditions combined with sub-par operations for several quarters. ”