Dore Law - September 2019

THE D or É R eport

D ore L aw G roup . net



Doré Rothberg McKay has officially launched a new tool we trust will be useful to your company — the Bankruptcy Tracker 2019. We’ve published information about the tracker in our newsletter since July (and we’ll continue to run it through the end of the year), but we wanted to take some extra time this month to fill you in on the tool’s full scope. At a glance (see the summary table inside our newsletter), our tracker lets you see the number of oilfield industry bankruptcies that have been filed in 2019, each of which are events that could affect your day-to-day credit and collection decisions. There has been a rise in oilfield bankruptcies since the year began, due to various contributing factors, including: • Low and fluctuating oil prices, which have caused many loans secured by reserves to become under-secured, triggering penalty or default loan terms • Depressed commodity prices in general, which have led E&P companies to reduce their exploration and development budgets • Competition for work that, with reduced drilling, has squeezed margins for most oilfield services companies • The reduction in reserve value that lenders are using as collateral, which often times drives the oilfield borrower into default pursuant to the loan documents

• Reluctance on the part of companies to “upgrade” their budgets, increase capacity, or borrow/invest more funds until the industry and product prices have stabilized This volume of oilfield industry bankruptcy filings doesn’t quite amount to the anarchy that took place in late 2014, but the increasing number of bankruptcies filed in 2019 suggests a shakeout of weaker or over- leveraged companies is still taking place. Just like lenders, credit departments will be more careful in making credit decisions and more vigorous in enforcing collections considering the trend.

Developing and sharing tools like the Bankruptcy Tracker 2019 are our way of giving back to our clients to help them stay sharp. A snapshot of select cases is provided within this month’s Doré Report , but for a complete and updated version of the Bankruptcy Tracker 2019 , contact Doré Rothberg McKay today. Clients like you have already put the Bankruptcy Tracker 2019 to work by comparing their customer lists with the list of bankruptcies, giving feedback to management on the number of collection problems avoided, and using it to support their credit and collection policies. We also offer a tool that will give you both IMMEDIATE notice of industry bankruptcies and information on most of the creditors involved within a day of a new filing: the Bankruptcy Alert . Each alert comes in the form of a detailed email that breaks down information we’ve extracted from the many filings that begin most company bankruptcies. If you are not already receiving this valuable email, contact us today at 281.829.1555 to be added to the list!

“We consider it our duty to keep an eye on industry trends and inform our clients of what we see.”

As the largest law firm in the Houston Energy Corridor, we at Doré Rothberg McKay feel we’re a part of the industry. We represent the most oilfield services companies of any law firm in Texas and file more mineral liens than any firm in the U.S., and we consider it our duty to keep an eye on industry trends and inform our clients of what we see. Our firm has represented service companies in nearly all of the complex oil and gas bankruptcies in the last several years and become the preeminent law firm in preferential transfer defense efforts.

-Zachary McKay

281.829.1555 • 1

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