Crude oil and natural gas hit peak prices in mid-2014, with U.S. crude oil hitting $107 per barrel in June of last year. Since then, prices have fallen precipitously, reaching a low of less than $50 per barrel for U.S. crude in late January before rising somewhat in recent months and then falling once again. Forecasts of where oil and gas prices are headed in coming months and years differ wildly.

In the wake of the sharp commodity price declines and facing future uncertainty, many upstream exploration and production (E&P) companies and, in turn, midstream companies and oilfield...

The oil and gas industry is driven by the price of its commodity, fossil fuels, which varies—sometimes dramatically. Although huge swings in value are rare, the recent 50 percent drop in the price of oil (with some analysts predicting a drop to $20 per barrel), combined with historically low natural gas prices, has required producers to restate their reserves and resulted in some of them defaulting on covenants and facing potential insolvency.

This upside-down situation will likely lead to more Chapter 11 proceedings for exploration and production (E&P) companies and related...

In the past five years nonconventional U.S. oil production has increased more than six-fold and by the end of 2014 had achieved the highest production levels of U.S. crude in 41 years. This explosive growth was fueled by the doubling of exploration and production (E&P) capex in extraction from shale or tight formations between 2008 and 2014, peaking at $125 billion, and has changed the dynamics of the worldwide oil supply equation.

Last summer, as oil prices peaked at around $115 per barrel, however, demand in Europe, Asia, and the U.S. began tapering off, due largely to...

The current chapter on the energy industry would be incomplete without insights from the field. The energy boom and subsequent bust led to some fairly extreme situations caused by some of the unique facets of the energy industry, the locations in which the energy boom played out, and the characteristics of investments in the middle market. Many of these situations became severe because of factors unique to the industry, but in the main, the root cause of the difficulty appears to have been the failure of some to follow some basic business processes.

This article offers some hard...

The Chapter 11 filing of SunEdison Inc. on April 21, 2016, marked the end of an extremely wild ride for shareholders of the world’s largest renewable-energy development company. Considered both a hedge fund and retail investor darling at its peak, SunEdison enjoyed a more than 2,100 percent increase in its share price between 2012 and 2015, trading as high as $33 a share, before experiencing a dizzying decline in August 2015, when its stock price plummeted 97 percent in a matter of weeks.

The ultimate demise of SunEdison was principally the result of an enormous amount of debt...

Distressed cycles often test the limits of “market” terms and documentation principles prevalent in industry-specific financing arrangements. For independent oil and gas exploration and production (E&P) companies, the industry turmoil that peaked in 2015-2016 put the fundamentals of reserve-based loans (RBLs) under the microscope.

Now that many E&P companies have deleveraged their balance sheets and commodity prices have begun to stabilize, many of the same lenders that suffered through the downturn are back in the market providing new RBLs. Although what is “market” for...