Plummeting Oil Prices Force Big US Shale Players to the Wall

Saturday, February 27, 2016
By Paul Martin

SputnikNews.com
27.02.2016

US banks are filling their reserves in preparation for a wave of defaults, as low oil prices force US shale producers into bankruptcy.

Two large US shale oil producers with a combined debt of $7.6 billion may be forced into bankruptcy next month because of low oil prices, which have fallen by around 70 percent since mid-2014, Bloomberg reported on Thursday.

Energy XXI, which owes $3.4 billion, missed an $8.8 million interest payment on its bonds last week, and SandRidge, which owes $4.2 billion, missed a $21.7 million bond interest payment.

In addition to selling high-yield bonds, the value of which lost 24 percent last year for the energy sector as a whole, those companies have borrowed money from banks including Royal Bank of Scotland Group Plc, UBS Group AG and BNP Paribas SA, Barclays Plc, Royal Bank of Canada and Morgan Stanley.

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