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Private Equity-Backed Companies Dominate 2020 Oil and Gas Bankruptcies

January 28, 2021

Private equity-backed companies comprised the majority of oil and gas producer bankruptcies in 2020. Of the companies that filed for bankruptcy last year, 57 percent are backed by private equity firms, or 26 of the 46 filings.[1]

The high number of oil and gas producer bankruptcies last year, as tracked by Haynes and Boone, made clear the risks of fossil fuel exploration and production as the pandemic impacted both demand and pricing.

Notably, 2020 saw an increase in bankruptcies with debt loads greater than $1 billion, with an unusually high number relative to the prior six years. More than two thirds (71%) of 2020’s multibillion-dollar bankruptcies were backed by private equity.

Source: Various; Haynes and Boone, LLP Oil Patch Bankruptcy Monitor, December 31, 2020


Private-equity backed oil companies such as Ultra Petroleum (backed by Fir Tree Capital Management), Chesapeake Energy (Carlyle Group was a major investor), and Unit Corporation (backed by Partners Group) each held more than $5 billion in aggregate debt. Ultra is particularly remarkable as it filed for bankruptcy twice in five years.

Even before oil prices collapsed into negative territory in the spring of 2020, private equity firms were having difficulty selling off their oil and gas producer holdings. Haynes and Boone partner Buddy Clark questioned private equity firms’ approach: “The investment model for private equity was to find the right people, invest money, have them drill one or two wells and then flip it,” Clark said in January 2020. “The question is, will that model ever come back?”

Given the growing trend to wean the world from fossil fuel-burning vehicles and the unlikely scenario of a return to pre-pandemic oil demand level, investments in oil and gas producers require in-depth assessment of long-term risks, particularly if they are backed by private equity.

Oil and gas companies that filed for bankruptcy last year were substantially more indebted than those filing in prior years. The aggregate debt of oil and gas bankruptcies in 2020 rivaled the record from 2016, even though there were fewer filings last year.


Source: Various; Haynes and Boone, LLP Oil Patch Bankruptcy Monitor, December 31, 2020

Private equity’s extensive use of debt to fund oil and gas acquisitions exposed investors to greater risk. The combined debt of the 46 oil producers that filed for bankruptcy through December 2020, was around $53 billion. Private equity-backed oil producers accounted for over 82 percent of that debt, owing a combined $43 billion. The average debt held by bankrupt private equity-backed crude producers was more than three times that of their non-private equity-backed peers.

Type of ProducerAverage Aggregate Debt
Private Equity-Backed$1,669,288,578
Other Owners$486,700,089

Source: Various; Haynes and Boone, LLP Oil Patch Bankruptcy Monitor, December 31, 2020

The table below shows an updated list of some of the private equity-backed oil and gas companies that filed for bankruptcy last year with debt loads exceeding $100 million.

Filing DateDebtorPrivate Equity OwnersTotal Secured and Unsecured Debt
1/27/2020SOUTHLAND ROYALTY COMPANYEnCap Investments; MorningStar Partners$625,047,200
3/23/2020SHERIDAN HOLDING COMPANY IWarburg Pincus$618,485,147
5/14/2020ULTRA PETROLEUM CORP.Fir Tree Capital Management LP; Disciplined Growth Investors Inc$5,556,148,072
5/15/2020GAVILAN RESOURCESBlackstone; Mesquite Energy$1,120,804,265
5/22/2020UNIT CORPORATIONOPTrust and Partners Group$4,808,182,228
5/31/2020TEMPLAR ENERGYBain Capital; Ares Management; Paulson & Co$465,700,000
6/14/2020EXTRACTION OIL & GASYorktown Partners; Luminus Management$2,522,573,161
6/17/2020CHISHOLM OIL AND GASAres Management, Apollo Global Management$560,003,485
6/25/2020SABLE PERMIAN RESOURCESEnergy and Minerals Group; OnyxPoint Global Management, Pantheon International$1,434,296,685
6/28/2020CHESAPEAKE ENERGY CORPORATIONCarlyle Group$11,800,000,000
6/28/2020LILIS ENERGYVarde Partners$579,876,334
7/15/2020CALIFORNIA RESOURCES CORPORATIONAres Management$6,285,823,505
7/16/2020BRUIN E&P PARTNERSArcLight Capital Partners$1,077,000,000
7/26/2020ROSEHILL RESOURCESEIG Global Energy Partners$362,700,000
7/30/2020DENBURY RESOURCESGoldenTree Asset Management LP; Fidelity$2,500,000,000
8/3/2020FIELDWOOD ENERGYRiverstone Energy; Canada Pension Plan Investments; ACE & Company$1,959,200,000
8/16/2020CHAPARRAL ENERGYBayou City Energy$487,500,000
9/2/2020URSA PICEANCE HOLDINGSDenham Capital$303,205,987

Source Haynes and Boone, LLP Oil Patch Bankruptcy Monitor, December 31, 2020

[1] Haynes and Boone’s data is reported through December 31, 2020

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