Survey: Half of energy companies expect bankruptcy

The second in a series of “point-in-time” surveys shows that nearly a quarter of the state’s oil related workforce has potentially already been laid off, and four in every five exploration and production companies has already begun shutting in wells, the Louisiana Oil and Gas Association said.
“Our members have indicated they’ve already been forced to lay off 23% of their workforce and the large majority are now taking steps to shut-in production,” Louisiana Oil & Gas Association President Gifford Briggs said. “We feared these outcomes would take place by mid-to-late May, but the crushing weight of the crisis is taking hold much quicker than expected. Without a doubt, we need federal and state policymakers to take immediate action to help mitigate further losses from these extreme market conditions.”
Louisiana’s severance tax rate is the highest in the country at 12.5%, nearly four times the neighboring Texas 4.6% rate. Oil prices closed most recently on the West Texas intermediate at $18.84,. Louisiana’s independent producers require an average of $37 a barrel to break even.
Further, more than half of company leaders indicated that bankruptcy or closures are likely. According to the Louisiana Workforce Commission and the Department of Natural Resources, the oil and gas industry employs approximately 33,900 workers operating around 33,650 oil and gas wells around the state.
This survey from LOGA’s members, which comprises 450 exploration and production and service companies across Louisiana, is below.
LOGA's survey results included:
--77.5% of operators have already begun taking steps to shut-in production
--97% are moderately or extremely concerned about the future of the industry
--51.35% said bankruptcy is likely
--34% applied for EIDL funds, of those only 25% received the funds they expected
--Of those who received funds, 46.67% indicted they were not enough to help them stay in business
--Of those who received funds, 72% indicated they were not enough to avoid layoffs
“We’re one of the largest employers in Louisiana with the highest average wages. Just imagine what shut-ins and company closures mean for individuals and communities. These are real dollars and their lack is going to be felt all across the state,” Briggs added.
“Of the things we can control, we must take bold action to enact immediate changes,” Briggs said. “We are looking forward to working with the legislature and the administration to figure out how to keep wells flowing and keep people employed as long as possible.”