Ninety North America oil and natural gas companies have gone under since January 2015.
The law firm Haynes and Boone reported earlier this month bankruptcies were driven by historically oil and natural gas prices. The average price of a barrel of oil in July of 2016 was $41.60, less than half the price oil barrels were selling for in the summer of 2014.
Oil companies have discharged approximately $66.5 billion in aggregate debt in dozens of bankruptcy cases. Forty-four of the now bankrupt oil and gas producers were located in Texas. The Lone Star state has seen oil production skyrocket thanks to drilling in the Eagle Ford and Barnett Shale formations.
Oil and natural gas prices are so low due to the development of hydraulic fracturing and horizontal drilling, which have made producing energy much cheaper, leading to more production. The swell in production occurred mainly in the U.S. and Canada, causing energy prices to drop 41 percent over the course of 2015. Other commodities fell in price as well, but not nearly as much as energy, according to the Energy Information Administration (EIA).
Fracking and horizontal drilling helped America surpass Russia early in 2015 as the world’s largest and fastest-growing producer of oil and natural gas. Fracking also takes credit for American oil and natural gas reserves being at their highest levels since 1972.
Consequentially, crude prices have fallen more than 60 percent since last summer due to surging oil production and weak demand. American oil production increased 75 percent over the last seven years. U.S. consumers spent $370 billion on gasoline in 2014, meaning that current low prices are equivalent to a $102 billion tax cut for the country. American households likely saved $700 to $750 at the pump in 2015, according to analysis by the EIA.