Some Bankrupt Oil and Gas Drillers Can’t Give Their Assets Away

Oil jumpjack (Hasan Jamali / Associated Press)
Hasan Jamali / Associated Press

From Dawn McCarty and Asjylyn Loder writing at Bloomberg:

Oil is in free fall and Terry Clark couldn’t be happier.

In mid-2014, when the crude price topped $100 a barrel, Clark made an offer to buy properties from Dune Energy Inc., a small driller with money trouble. Dune turned him down. A year later, as oil plunged to $60 a barrel, Dune filed for bankruptcy and Clark’s White Marlin Oil & Gas Co. picked up the assets at auction at a deep discount.

“What we offered versus what we got it for, it’s a great price,” Clark said. “We’re going to continue to play these bankruptcies. We’re participating in two more right now.”

Winners and losers are emerging from the energy bust. What’s a meal for Clark is indigestion for banks that financed the boom using oil and gas properties as collateral. The four biggest U.S. banks — Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co. and Wells Fargo & Co. — have set aside at least $2.5 billion combined to cover souring energy loans and have said they’ll add to that if prices stay low.

Read the rest of the story at Bloomberg.