Posted on 11/22/2015 1:43:38 PM PST by Lorianne
Low oil prices are leaving many oil and gas companies with difficult debt loads, causing them to default at an extraordinary rate.
On top of that, rating firm Moody's forecasts the default rate will increase.
The strain on the oil patch comes after years of borrowing heavily at the start of the domestic energy renaissance.
Marc Lasry, the chief executive of distressed investing specialist Avenue Capital Group, said these energy companies boosted their borrowings to between $250 billion and $300 billion, compared with the $100 billion at the start of this year.
The energy boom of the past decade was fueled by a wave of credit from U.S. banks that now say they expect more delinquencies and charge-offs from energy companies this year.
(Excerpt) Read more at cnbc.com ...
That’s a bunch of jobs that will be lost if they default. Right before the holidays is not a fun time to lose a job either.
It’s just like 1986 all over again. Silverado Savings and Loan...
So I read this along with the subprime auto loans in trouble and in,surname companies on the ACA exchanges needing to be bailed out.
But didn’t Hussein tell us the crisis is over?
In,surname= insurance
There’s never a fun time to lose a job. I once had my position eliminated on New Years Eve.
I’m wondering if this whole scenario hasn’t been a collaborated effort by dear leader and the Saudis to destroy ‘big oil’ and eventually drive prices through the roof
God bless you. And you’re right - never fun to lose a job.
We have been dancing near the edge of cliff for quite awhile now. All it will take (in my estimation) is one small push, and the cascade downwards will be brutal.
The Fed is out of bullets, ink, and answers.
Watch the IMF.
“It’s just like 1986 all over again. Silverado Savings and Loan...”
I cut my business teeth on the collapse of the oil industry in 1982 and when 1986 came, I knew how to survive thanks to the diploma I got in 1982 from the School of Hard Knocks back then.
Since then, I have NEVER given an oil company or related companies credit. They need my products and I make them pay with a credit card...no Net 30 crap any more.
The surprising fact is that they have no problem paying with a credit card but wish I would give them commercial net 30 day open credit.
Fool me once, shame on you. Fool me twice, shame on me.
You fools out there that are looking at your A/R and watching the oil companies go from the 30, to the 45 to the 60, to the 90 day columns will understand what it is to loose everything you have when they file bankruptcy.
A word of experience on how to survive while selling your products or services to the oil industry.
Building a business on borrowed money is a loosing strategy. If you can’t pay for it you don’t need it.
“I’ll pay in full when the well comes in.”
I have made a decent career out of financial crises. I should be able to hold on until this one pops. Doesn’t sound like you will be a potential client.
I know a lot of people who didn't get paid, even ones on various payrolls.
I noted who didn't pay their hands and never worked for one of them.
When I had my own outfit, when people subcontracted out to me, I scrimped and saved until I got so I could pay them when they tendered the invoice. (Nothing worse than days off and no money, IMHO.) Those who worked with me were loyal and did their best as a result.
In 1983 I was a Geologist and making more money than a doctor. The oilfield crashed and burned and I am now a pharmacist. In recent years the oil field boomed again and crashed again. Just like in 1983 we will come back again.
I was at the pharmacy the other day to pick up a prescription - I could not believe how incessantly busy they were. I had to go back to the store several times that week, and each time, insane amount of customers, phone calls, and lines.
Either the percentage of Americans taking some kind of medication has exploded, or I am just noticing the level of tempo in pharmacies.
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